Exhibit 10.1
EXECUTION COPY
PARTICIPATION AGREEMENT
dated as of April 30, 2002
among
USEB AIRCRAFT LIMITED
as Initial Borrower Party and Initial Lessor Party
XXXXX LEASING LIMITED
XXXXXXX LEASING LIMITED
XXXXXXX LEASING CORPORATION
XXXXXXX LEASING (IRELAND) LIMITED
XXXXXXX LEASING (CYPRUS) LIMITED
each as an Initial Lessee Party
WALKERS SPV LIMITED
not in its individual capacity except as expressly set forth herein,
but solely as Trustee of the USEB Aircraft Trust
as Initial Lessor Parent
BARCLAYS BANK PLC
as Initial Lender
BARCLAYS BANK PLC
as Facility Agent for the Lenders
XXXXX FARGO BANK NORTHWEST, N.A.
not in its individual capacity, except as expressly
provided herein, but solely
as Security Trustee
GATX FINANCIAL CORPORATION
as a Guarantor
AND
EXPORT-IMPORT BANK OF THE UNITED STATES
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Ten (10) Boeing Model 737-800 Aircraft
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Ex-Im Bank Guarantee No. AP077971XX - United States - GATX
Milbank, Tweed, Xxxxxx & XxXxxx LLP
TABLE OF CONTENTS
Page
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SECTION 1. Definitions............................................................................... 2
SECTION 2. Purchase and Lease of the Aircraft........................................................ 3
SECTION 3. Borrowing Dates........................................................................... 3
SECTION 4A. Conditions Precedent to Obligations of the Initial Borrower, each Lender,
the Facility Agent, the Security Trustee and Ex-Im Bank on the first Borrowing Date...... 4
SECTION 4B. Conditions Precedent to Obligations of the relevant Initial Borrower, each
Lender, the Facility Agent, the Security Trustee and Ex-Im Bank on the
Borrowing Date for an Aircraft........................................................... 7
SECTION 4C. Further Conditions Precedent to Obligations of Ex-lm Bank; Utilization
Procedures............................................................................... 11
SECTION 5. Conditions Precedent to Obligations of the Initial Lessee of an Aircraft.................. ]2
SECTION 6A. Borrower Party. Lessor Party and Lessee Party Designations................................ 13
SECTION 6B. Borrower, Lessor and Lessee Substitutions................................................. 16
SECTION 7. Representations and Warranties of Initial Lessee Parties.................................. 18
SECTION 8A. General Covenants of each Lessee Party.................................................... 20
SECTION 8B. Covenants of each Lessee relating to the Aircraft Financing Documents..................... 22
SECTION 8C. Certain Covenants Relating to the Re-leasing of Aircraft.................................. 24
SECTION 8D. Certain Covenants of each Lessee relating to Operational Undertakings;
Inspection; Registration; Nameplates and Insurance....................................... 29
SECTION 8E. Certain Covenants of GFC, Lessees and Lessors relating to Modifications
to Leases and Operating Leases and the Disposition of Aircraft........................... 30
SECTION 8F. General Covenants of GFC.................................................................. 31
SECTION 8G. Additional Security....................................................................... 32
SECTION 9. Representations, Warranties and Covenants of Initial Lessor Party, Initial
Lessor Parent, Walkers SPV, the Facility Agent, the Initial Lender and the
Security Trustee......................................................................... 33
SECTION 10. Indemnities and Taxes..................................................................... 43
SECTION 11. Lien Removal.............................................................................. 54
SECTION 12. Expenses.................................................................................. 54
SECTION 13. Creation of Trust; the Security Trustee; Successor Trustees; Enforcement;
Consent of Secured Parties; Right to Exercise Remedies................................... 55
SECTION 14. Confidentiality........................................................................... 64
SECTION 15. WAIVER OF JURY TRIAL...................................................................... 65
SECTION 16. Loan Acceleration; Mandatory Prepayment................................................... 65
SECTION 17. Minimum Rent.............................................................................. 65
SECTION 18. Lessee's Right to Perform for Lessor...................................................... 66
SECTION 19. Complete Agreement........................................................................ 66
(i)
Section 20. No Discharge, Etc. ....................................................................... 66
Section 21. Assignment of Rent, Security Deposits; Application of Funds. ............................. 67
SECTION 22. Insurance Proceeds........................................................................ 69
SECTION 23. No Waiver of Conditions; Further Assurances. ............................................. 69
SECTION 24. Assignments and Transfers by Lenders; Agency.............................................. 70
SECTION 25. Suspension and Cancellation by Ex-Im Bank................................................. 70
SECTION 26. Reimbursement Obligations; Transfer. ..................................................... 70
SECTION 27. Restructuring............................................................................. 72
SECTION 28. Certain Prepayments....................................................................... 72
SECTION 29. Consultation.............................................................................. 72
SECTION 30. Limitations of Liability. ................................................................ 72
SECTION 31. Guarantee of Designated Persons. ......................................................... 74
SECTION 32. Subordination............................................................................. 75
SECTION 33. Miscellaneous. ........................................................................... 77
(ii)
SCHEDULE 1 - The Aircraft
SCHEDULE 2 - Minimum Lease Provisions
SCHEDULE 3 - Operational Undertakings
SCHEDULE 4 - Replacement of Parts, Alterations, Modifications and Additions
Undertakings
SCHEDULE 5 - Insurance Undertakings
SCHEDULE 6 - Filing Details
EXHIBIT A - Utilization Procedures for Credits Guaranteed by Ex-Im Bank
EXHIBIT B - Form of Accession Certificate
EXHIBIT C-l - Form of Designation Letter
EXHIBIT C-2 - Form of Substitution Supplement
EXHIBIT D - Form of Borrowing Date Supplement
APPENDIX A - Definitions
APPENDIX AF - Application of Funds
APPENDIX MP - Material Adverse Effect Procedures
(iii)
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT dated as of April 30, 2002 is among USEB
AIRCRAFT LIMITED, a limited liability company duly incorporated and validly
existing under the laws of the Cayman Islands (the "INITIAL BORROWER PARTY" or
the "INITIAL LESSOR PARTY"); XXXXXXX LEASING LIMITED, a limited liability
company duly incorporated and validly existing under the laws of the Cayman
Islands ("CAYMAN LESSEE PARTY NO. 1"); XXXXX LEASING LIMITED, a limited
liability company duly incorporated and validly existing under the laws of the
Cayman Islands ("CAYMAN LESSEE PARTY NO. 2"); XXXXXXX LEASING CORPORATION, a
Delaware corporation ("DELAWARE LESSEE PARTY"); XXXXXXX LEASING (IRELAND)
LIMITED, a company duly organized and validly existing under the laws of Ireland
("IRISH LESSEE PARTY"); XXXXXXX LEASING (CYPRUS) LIMITED, a company duly
organized and validly existing under the laws of Cyprus ("CYPRIOT LESSEE ", and,
together with Cayman Lessee Party No. 1, Cayman Lessee Party No. 2, Delaware
Lessee Party and Irish Lessee Party, the "INITIAL LESSEE PARTIES"); WALKERS SPV
LIMITED, a limited liability company duly incorporated and validly existing
under the laws of the Cayman Islands, not in its individual capacity except as
expressly set forth herein, but solely as trustee of the USEB Aircraft Trust
("LESSOR PARENT"); BARCLAYS BANK PLC, a public limited company incorporated and
existing under the laws of England and Wales, as the initial Lender (the
"INITIAL LENDER"); BARCLAYS BANK PLC, a public limited company incorporated and
existing under the laws of England and Wales, as Facility Agent for the Lenders
under the Operative Documents (the "FACILITY AGENT"): XXXXX FARGO BANK
NORTHWEST, N.A., a national banking association duly organized and validly
existing under the laws of the United States of America, not in its individual
capacity, except as expressly provided herein, but solely as Security Trustee
(the "SECURITY TRUSTEE"); GATX FINANCIAL CORPORATION, a Delaware corporation
("GFC" and together with GATX Corp, the "GUARANTORS"); and EXPORT-IMPORT BANK OF
THE UNITED STATES ("EX-IM BANK").
W I T N E S S E T H:
WHEREAS, Original Purchaser has entered into the Purchase Agreement with
the Manufacturer, providing, among other things, for the sale by the
Manufacturer to Original Purchaser of the Delivered Aircraft and the Remaining
Aircraft;
WHEREAS, in the case of each Delivered Aircraft, pursuant to the Purchase
Agreement, prior to the Borrowing Date of the Loan proposed to be made in
respect of such Aircraft, Manufacturer will have sold each such Aircraft to the
relevant Bridge Owner of such Aircraft, and the relevant Bridge Owner will have
purchased such Aircraft from Manufacturer;
WHEREAS, in the case of each Delivered Aircraft, at the time of such sale
and purchase it was or, as the context may require, is contemplated that each
such Aircraft would, or will, be financed as contemplated by this Agreement and
the other Operative Documents;
WHEREAS, in the case of each Delivered Aircraft, on the Borrowing Date
therefor, pursuant to the Aircraft Sale Agreement for each such Aircraft, the
relevant Bridge Owner will sell such Aircraft to the Initial Borrower for such
Aircraft and will assign certain of its rights and interests in and to the
Purchase Agreement to such Initial Borrower pursuant to a Purchase Agreement
Assignment with respect to such Aircraft;
WHEREAS, in the case of each Remaining Aircraft, on the Borrowing Date
therefor, Original Purchaser will assign certain of its rights and interests in
and to the Purchase Agreement to the Initial Borrower for such Aircraft pursuant
to the Purchase Agreement Assignment with respect to such Aircraft, including,
without limitation, its right to purchase such Aircraft from, and receive title
thereto from, the Manufacturer;
WHEREAS, in the case of each Aircraft, on the Borrowing Date therefor, the
Initial Borrower for such Aircraft will lease such Aircraft to the Initial
Lessee for such Aircraft pursuant to the Lease for such Aircraft, and such
Lessee will lease such Aircraft from such Initial Borrower pursuant to such
Lease;
WHEREAS, in the case of each Aircraft, on the Borrowing Date therefor, the
Initial Lessee for such Aircraft will have subleased, or will sublease, as the
case may be, such Aircraft either (i) directly to the Initial Operating Lessee
for such Aircraft, or (ii) to a Sublessee designated for such Aircraft which in
turn will have sub-subleased or will sub-sublease such Aircraft to the Initial
Operating Lessee for such Aircraft, in either case, pursuant to the Initial
Operating Lease for such Aircraft;
WHEREAS, pursuant to the GATX Guarantee each of the Guarantors has agreed
to issue to the Security Trustee, on behalf of the Secured Parties, its
guarantee of the obligations of the Borrowers and the Lessees under the
Operative Documents;
WHEREAS, pursuant to the Loan Agreement, the Lenders have agreed, on the
terms and conditions hereinafter provided, to make the Loans to the Borrowers;
WHEREAS, pursuant to the Ex-Im Bank Guarantee, Ex-Im Bank has agreed, on
the terms and conditions hereinafter provided, to issue to the Facility Agent,
on behalf of the Lenders, its guarantee of the repayment of the principal of,
and certain interest on, each Note issued pursuant to the Loan Agreement;
WHEREAS, the proceeds of each Loan shall be used by the Initial Borrower
thereof to finance (i) up to 85% of the costs for the purchase in the United
States, and export, of the Aircraft referable to such Loan to the country where
such Aircraft will initially be based and primarily operated (as approved by
Ex-Im Bank), and (ii) 100% of the related Ex-Im Bank Exposure Fee; and
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Definitions. Unless the context otherwise requires, (a)
capitalized terms used herein and not otherwise defined herein shall have the
meanings set forth in Part I of
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Appendix A hereto for all purposes of this Agreement and (b) the rules of
construction and interpretation for this Agreement shall be set forth in Part II
of Appendix A hereto.
SECTION 2. Purchase and Lease of the Aircraft. Subject to the terms and
conditions of this Agreement, the Loan Agreement and the other Operative
Documents, as they relate to each Aircraft:
(a) in the case of each Delivered Aircraft, on the Borrowing Date of the
Loan proposed to be made in respect of such Aircraft (i) the Lenders agree to
make such Loan to the Initial Borrower for such Aircraft pursuant and subject to
the terms of the Loan Agreement, (ii) such Initial Borrower agrees (A) to
purchase such Aircraft from the relevant Bridge Owner pursuant to the Aircraft
Sale Agreement with respect to such Aircraft, (B) to lease such Aircraft, as the
Initial Lessor thereof, pursuant to the Lease therefore, to the Initial Lessee
for such Aircraft, (iii) such Bridge Owner agrees (A) to sell such Aircraft to
such Initial Borrower and (B) to repay part of the Intercompany Loan advanced to
it in the amount of the Loan in respect of such Aircraft and cause the Bridge
Lender to release the Bridge Security, if any, in respect of such Aircraft and
the Pledged Securities of the relevant Bridge Owner, and (iv) such Lessee agrees
to lease such Aircraft from such Lessor pursuant to such Lease (subject to the
Initial Operating Lessee and Sublease, if any, for such Aircraft, as specified
in the Notice of Borrowing for such Aircraft); and
(b) in the case of each Remaining Aircraft, on the Borrowing Date of the
Loan proposed to be made in respect of such Aircraft, (i) the Lenders agree to
make a Loan in respect of such Aircraft to the Initial Borrower for such
Aircraft pursuant and subject to the terms of the Loan Agreement, (ii) such
Borrower agrees (A) to purchase such Aircraft from the Manufacturer pursuant to
the Purchase Agreement and Purchase Agreement Assignment for such Aircraft and
(B) to lease such Aircraft, as the Initial Lessor thereof, pursuant to the Lease
therefor, to the Initial Lessee for such Aircraft, (iii) such Lessee agrees (A)
to lease such Aircraft from Initial Lessor pursuant to such Lease, and (B) to
sub-lease such Aircraft either, as specified in the Notice of Borrowing for such
Aircraft, (x) directly to the Initial Operating Lessee for such Aircraft
pursuant to the Initial Operating Lease for such Aircraft or (y) to the
Sublessee for such Aircraft designated in the Notice of Borrowing for such
Aircraft, and (iv) if there is a Sublessee for such Aircraft, to procure that
such Sublessee sub-sublease such Aircraft to such Initial Operating Lessee.
Notwithstanding any of the foregoing, the separate obligation of any
Person under Sections 4A, 4B, 4C and 5 of this Agreement shall not be subject to
the satisfaction of any condition within its control to satisfy.
SECTION 3. Borrowing Dates. GFC shall provide a copy of each Notice of
Borrowing delivered pursuant to Section 2.2 of the Loan Agreement to the
Security Trustee and the Initial Lessee and Initial Borrower specified therein.
With respect to the Aircraft which is the subject of a Notice of Borrowing,
subject to the terms and conditions of this Agreement and the Loan Agreement,
the following actions shall take place on the Borrowing Date applicable to such
Aircraft:
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(a) On such Borrowing Xxxx, the Lenders shall make the proceeds of the
Loan to be made for such Aircraft available to the Initial Borrower for such
Aircraft.
(b) On such Borrowing Date, in the case of each Remaining Aircraft
pursuant to the Purchase Agreement and the Purchase Agreement Assignment for
such Aircraft and, in the case of each Delivered Aircraft, pursuant to the
Aircraft Sale Agreement for such Aircraft, the Initial Lessor shall purchase and
accept delivery of such Aircraft from the Manufacturer or, in the case of a
Delivered Aircraft, from the relevant Bridge Owner of such Aircraft, pay to the
Manufacturer, or such Bridge Owner, as the case may be, an amount equal to the
Purchase Price for such Aircraft and pay or cause to be paid to Ex-Im Bank the
related Ex-Im Bank Exposure Fee in respect of the Note being issued on such
Borrowing Date.
(c) Subject to and following the sale of such Aircraft to the applicable
Initial Lessor by Manufacturer or Bridge Owner, as the case may be, on such
Borrowing Date, such Initial Lessor shall cause such Aircraft to be delivered to
the Initial Lessee for such Aircraft under the Lease for such Aircraft, and, if
not already so delivered, such Lessee shall cause such Aircraft to be delivered
to either (A) the Initial Operating Lessee for such Aircraft under the Initial
Operating Lease or (B) the Sublessee (if any is designated in the relevant
Notice of Borrowing) for such Aircraft under the applicable Sublease, and shall
procure that such Sublessee shall cause such Aircraft to be delivered to the
Initial Operating Lessee for such Aircraft under the applicable Initial
Operating Lease. Upon the tender for delivery of such Aircraft by Initial Lessor
to Initial Lessee, and, if applicable, by Initial Lessee to such Sublessee, such
Initial Lessee unconditionally agrees to accept delivery of such Aircraft (and,
if applicable, to procure that such Sublessee accepts delivery of such
Aircraft), "AS-1S, WHERE-IS", in its then condition for lease under such Lease
or sub-lease under such Sublease.
(d) Prior to the delivery of such Aircraft as contemplated in this Section
3, if the same is a Remaining Aircraft, each of the Initial Borrower, Initial
Lessee and Sublessee, if any, for such Aircraft shall appoint the Initial
Operating Lessee or the Initial Operating Lessee's designee as its
attorney-in-fact in writing to accept delivery of such Aircraft and the
acceptance by such attorney-in-fact shall be deemed to constitute acceptance of
the Aircraft under the Purchase Agreement, Lease, Sublease and the Initial
Operating Lessee for such Aircraft.
SECTION 4A. Conditions Precedent to Obligations of the Initial Borrower,
each Lender, the Facility Agent, the Security Trustee and Ex-Im Bank on the
first Borrowing Date. The obligations of each of the Initial Borrower Party,
each Lender, the Facility Agent, the Security Trustee and Ex-Im Bank to be
performed on the first Borrowing Date, in respect of the Aircraft to be financed
on such date, are subject to satisfaction of the following conditions:
(a) The Initial Borrower Party, the Facility Agent, the Security Trustee
and Ex-Im Bank shall have received, except as otherwise indicated below, a duly
executed copy of each of the following, duly authorized and delivered by the
respective parties thereto (other than by such party):
(i) the Participation Agreement;
(ii) the Loan Agreement;
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(iii) the Ex-Im Bank Guarantee (which shall have been delivered
solely to Ex-Im Bank and the Facility Agent);
(iv) the GATX Guarantee;
(v) the Initial Lessor Share Pledge Agreement;
(vi) each Initial Lessee Share Pledge Agreement;
(vii) the Initial Declaration of Trust;
(viii) the Corporate Services Agreement; and
(ix) the Borrower Indemnity Agreement (which shall have been
delivered solely to GFC, the Initial Lender and the Facility Agent, with a
copy to Ex-Im Bank).
(b) The Facility Agent, the Security Trustee and Ex-Im Bank shall have
received the following, in each case in form and substance satisfactory to it
(in the case of the Facility Agent and the Security Trustee, acting reasonably):
(i) the original Pledged Securities of the Initial Borrower
Party and each Initial Lessee Party, together with undated share transfer
forms executed by the Initial Lessor Parent and Initial Lessee Parent, as
the case may be, and undated resignations executed by each director and
officer of the Initial Borrower Party and each Initial Lessee Party.
(ii) evidence of the acceptance of appointment of the Process
Agents appointed pursuant to Section 33(d) and the payment of the Process
Agent's fees for a period commencing on or prior to such Borrowing Date
and ending on or after March 31, 2015.
(iii) certificates dated such Borrowing Date of the Initial
Borrower Party, each Initial Lessee Party, the Original Purchaser and the
Initial Lessor Parent, each signed by an Authorized Person thereof,
certifying as true and correct, (1) its Constituent Documents, (2) a copy
of the minutes of the meeting of its board of directors at which
resolutions were duly adopted authorizing or ratifying (as appropriate)
the execution, delivery and performance by it of the Operative Document to
which it is or will be a party and each other document required to be
executed and delivered by it in accordance with the provisions thereof,
(3) its power of attorney authorizing certain named individuals to execute
and deliver the documents referred to in its minutes described in the
preceding clause (2), (4) the incumbency and specimen signatures of each
Person authorized to execute and deliver such documents on its behalf, and
(5) its solvency;
(iv) certificates dated such Borrowing Date of each Guarantor and
the Initial Lessee Parent, each signed by a duly Authorized Person
thereof, certifying as true and correct (1) its Constituent Documents, (2)
a copy of the minutes of the meeting of its board of directors or action
of its directors by written consent at or by which resolutions were duly
adopted authorizing or ratifying (as appropriate) the execution, delivery
and
5
performance by it of (in the case of the Guarantors) the GATX Guarantee
and each GATX Guarantee Confirmation, (in the case of the Initial Lessee
Parent) each Initial Lessee Share Pledge Agreement and (in the case of GFC
and the Initial Lessee Parent) each other Operative Document to which it
is or will be a party and each other document required to be executed and
delivered by it in accordance with the provisions thereof, (3) the
incumbency and specimen signatures of each Person authorized to execute
and deliver such documents on its behalf and (4) its solvency;
(v) a certificate signed by the Secretary or an Assistant
Secretary of the Trust Company, certifying as true and correct (1) its
Articles of Association and by-laws, (2) evidence of the authority of the
Trust Company, in its individual capacity and as Security Trustee to
execute, deliver and perform in its individual capacity or such other
capacity its obligations under this Agreement, the Aircraft Security
Documents and each other Operative Document to which it is or will be a
party, and (3) the incumbency and specimen signatures of each person
authorized to execute and deliver such documents on its behalf;
(vi) the opinions, each dated such Borrowing Date, of:
(A) Xxxxxxxx Xxxxxx Xxxxxxxx, special Irish counsel, regarding
the participation of the Irish Lessee Party in the transactions
contemplated by the Operative Documents;
(B) Antis Triantafyllides & Sons, special Cyprus counsel,
regarding the participation of the Cyprus Lessee Party in the
transactions contemplated by the Operative Documents;
(C) Walkers, special Cayman counsel, regarding the
participation of the Original Purchaser, the Initial Borrower Party,
Cayman Lessee Party No. 1 and Cayman Lessee Party No. 2 in the
transactions contemplated by the Operative Documents;
(D) In-house counsel to GFC regarding the participation of the
Guarantors, the Initial Lessee Parent and the Delaware Lessee Party
in the transactions contemplated by the Operative Documents;
(E) Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, special New York
counsel to the Guarantors, relating to the transactions contemplated
by the Operative Documents;
(F) Ray, Xxxxxxx & Xxxxxxx, special counsel to the Security
Trustee;
(G) In-house counsel to the Manufacturer relating to the
Airframe Warranties Agreement;
(H) In-house counsel of the Engine Manufacturer relating to
the Engine Warranties Agreement;
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(vii) copies of duly completed UCC-1 financing statements covering
the Pledged Securities, each of which shall have been delivered by the
relevant "debtors", and such financing statements and other statements or
documents to the same purposes shall have been duly filed in all places
that Ex-Im Bank or the Facility Agent shall have reasonably requested and
all other action necessary or desirable to perfect the security interests
intended to be created thereby shall have been taken; and
(viii) such other documents or evidence with respect to the Initial
Borrower Party, the Initial Lessee Parties, the Initial Lessor Parent, the
Initial Lessee Parent and the Guarantors as Ex-Im Bank or the Facility
Agent may reasonably request in connection with the Operative Documents
and the transactions contemplated thereby.
(c) The matters disclosed in the Disclosure Letter (if any) shall be
satisfactory to Ex-Im Bank in its absolute discretion.
SECTION 4B. Conditions Precedent to Obligations of the relevant Initial
Borrower, each Lender, the Facility Agent, the Security Trustee and Ex-Im Bank
on the Borrowing Date for an Aircraft. The obligations of the Initial Borrower
with respect to an Aircraft, each Lender, the Facility Agent, the Security
Trustee and Ex-Im Bank to be performed on the Borrowing Date referable to such
Aircraft and in respect of such Aircraft to be financed hereunder on such date,
are subject to satisfaction of the following conditions:
(a) Each of the Facility Agent and Ex-Im Bank shall have received a Notice
of Borrowing for the Loan relating to such Aircraft in accordance with the terms
of Section 2.2 of the Loan Agreement and the Security Trustee shall have
received a copy of such notice in accordance with Section 3.
(b) No Lease Default or Loan Default for any Aircraft shall have occurred
and be continuing on such Borrowing Date.
(c) The Facility Agent, the Security Trustee and Ex-Im Bank shall have
received in form and substance satisfactory to each of them (in the case of the
Facility Agent and the Security Trustee, acting reasonably):
(i) a duly executed original of each of the Aircraft Financing
Documents for such Aircraft, duly authorized and delivered by the
respective parties thereto (other than by such party), other than the Note
for such Aircraft (copies only of which shall be provided to the Security
Trustee and Ex-Im Bank, and the original of which shall be provided to the
Facility Agent(which such Note shall bear an executed Guarantee Legend
endorsement));
(ii) evidence that (A) each of such Initial Borrower and the Initial
Lessor, Initial Lessee, Sublessee (if any) and Initial Operating Lessee,
in each case, for such Aircraft, shall have taken all necessary or
advisable actions with the applicable Civil Aviation Authority so that
such Aircraft can be duly certified by such Civil Aviation Authority and
(to the fullest extent permissible in accordance with Applicable Law of
the relevant Initial State of Registration) duly registered in the name of
such Initial Lessor as owner, such Initial Lessee as lessee, such Initial
Operating Lessee as operator and the
7
Security Trustee as mortgagee, and no other Lien over the Aircraft shall
have been registered with such Civil Aviation Authority,(B) the Initial
Lessee for such Aircraft shall have taken all action necessary or
desirable for the perfection in any Relevant Jurisdiction referable to
such Aircraft of the Lien constituted by the Operating Lessor Security
Assignment and (unless otherwise agreed by Ex-Im Bank) the Assignment of
Insurances (if any), in each case relating to such Aircraft, and (C) such
Initial Borrower and Initial Lessee shall have taken all actions necessary
or desirable for the due registration of the Aircraft Mortgage or, as
applicable, and if required by the Applicable Law of the Initial State of
Registration, the Local Mortgage, in each case for such Aircraft, with the
Civil Aviation Authority of the Initial State of Registration for such
Aircraft; provided always, that some or all of the requirements of
paragraphs (B) and (C) of this Section 4B(c)(ii) may be waived with
respect to such Aircraft on or prior to such Borrowing Date in a waiver
agreed in writing between GFC and Ex-Im Bank, as contemplated in Section
8B(b));
(iii) to the extent not already evidenced by the documents delivered
pursuant to Sections 4A(b)(iii), 4A(b)(iv), and, if applicable, 6A(c)(E),
such evidence as it shall reasonably request regarding the authorization,
execution, delivery and performance by either Guarantor, the Security
Trustee, the Original Purchaser, such Initial Borrower, such Initial
Lessee or such Initial Sublessee (if any) of the Aircraft Financing
Documents for such Aircraft to which they are respectively a party (which,
in the case of either Guarantor or the Security Trustee, shall be an
officers' and specimen signature certificate issued by an Authorized
Person thereof and, in the case of any other such Person, shall be a
specimen signatures certificate, and certified true copies of a board
resolution and a power of attorney, in each case of such other Person);
(iv) evidence that all licenses, approvals, consents, registrations,
exemptions and filings from, of or with (as the case may be) any
Government Body in any Relevant Jurisdiction referable to such Aircraft
(excluding any licenses, approvals, consents, registrations, exemptions
and filings required under Section 4B(c)(ii) or which would have be
required thereunder but for the proviso thereto)) necessary or advisable
in connection with the execution, delivery and performance and observance
of the Aircraft Financing Documents referable to such Aircraft and
(excluding as aforesaid) for the legality, validity, enforceability, and
effectiveness thereof, have been obtained or effected on an unconditional
basis and remain in full force and effect (or, in the case of any such
registrations and filings to be effected after such Borrowing Date, that
arrangements satisfactory to Ex-Im Bank and the Facility Agent (in the
case of the Facility Agent, acting reasonably) have been made for the
effecting of the same within any applicable time limit);
(v) a certificate of insurances and the related broker's
undertakings in respect of such Aircraft conforming to the terms and
requirements of Section 10 of the Lease thereof and Section 11 (or
equivalent section to Section 11 of the Model Form Operating Lease) of the
Initial Operating Lease thereof;
(vi) if Reinsurances are required in respect of such Aircraft in
accordance with Section 10 of the Lease thereof and Section 11 (or
equivalent section to Section 11 of the
8
Model Form Operating Lease) of the Initial Operating Lease thereof, a
certificate of reinsurances and the related broker's undertakings in
respect of such Aircraft conforming to the terms and requirements of such
Sections;
(vii) the opinions, each dated such Borrowing Date, of:
(A) if the Irish Lessee Party is the Initial Lessee or
Sublessee of such Aircraft, Xxxxxxxx Xxxxxx Xxxxxxxx, special Irish
counsel, regarding the participation of the Irish Lessee Party in
the transactions contemplated by the Aircraft Financing Documents
referable to such Aircraft;
(B) if the Cypriot Lessee Party is the Initial Lessee or
Sublessee of such Aircraft, Antis Triantafyllides & Sons, special
Cypriot counsel, regarding the participation of the Cypriot Lessee
Party in the transactions contemplated by such Aircraft Financing
Documents;
(C) if any of Cayman Lessee Party No. 1, Cayman Lessee Party
No. 2, the Initial Borrower Party or the Original Purchaser is the
Initial Lessee, Sublessee, Initial Lessor, Initial Borrower or
seller of such Aircraft (as the case may be), Walkers, special
Cayman counsel, regarding the participation of the applicable Person
or Persons in the transactions contemplated by such Aircraft
Financing Documents;
(D) if the Initial Borrower, Initial Lessor, Initial Lessee or
(if any) Sublessee is not one of the Persons mentioned in paragraphs
(A), (B) or (C) above, special counsel in the jurisdiction of
organization of such Person regarding the participation of such
Person in the transactions contemplated by such Aircraft Financing
Documents;
(E) in-house counsel to GFC regarding the GATX Guarantee
Confirmation referable to such Aircraft;
(F) Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, special New York
counsel to the Guarantors, relating to the transactions contemplated
by such Aircraft Financing Documents;
(G) Ray, Xxxxxxx & Xxxxxxx, special counsel to the Security
Trustee;
(H) Local Counsel selected by GFC and satisfactory to Ex-Im
Bank, special counsel on matters of law in the jurisdiction of the
Initial State of Registration of such Aircraft, relating to the
transactions contemplated by the Aircraft Financing Documents for
such Aircraft;
(I) if requested by Ex-Im Bank, acting reasonably, special
counsel to Ex-Im Bank and the Security Trustee on matters of the law
in the jurisdiction of the Initial State of Registration of such
Aircraft, relating to the transactions contemplated by the Aircraft
Financing Documents for such Aircraft; and
9
(J) in-house counsel to the Manufacturer relating to the Bills
of Sale issued by Manufacturer and Manufacturer's Subsidiary in
respect of such Aircraft;
(viii) copies of (A) the invoice for such Aircraft issued by the
Manufacturer, (B) the Bills of Sale for such Aircraft issued by the
Manufacturer and the Manufacturer's Subsidiary with, in the case of the
Remaining Aircraft, the original to be delivered to the Security Trustee,
(C) the BFE Bills of Sale for such Aircraft issued by GFC and the
Manufacturer and (D) in the case of each Delivered Aircraft, the Xxxx of
Sale for such Aircraft issued by the Bridge Owner thereof (with the
original to be delivered to the Security Trustee), in each case in form
and substance satisfactory to Ex-Im Bank;
(ix) a copy of the FAA export certificate of airworthiness for such
Aircraft;
(x) a copy of the Certificate of Registration for such Aircraft;
(xi) a copy of the Certificate of Airworthiness for such Aircraft;
(xii) copies of UCC-1 financing statements covering the Aircraft
Security Documents for such Aircraft, each of which shall have been
delivered by the relevant "debtors", and such financing statements and
other statements or documents to the same purposes shall have been duly
filed in all places that Ex-Im Bank shall have reasonably requested, and
all other action (excluding such action required under Section 4B(c)(ii)
or which would have be required thereunder but for the proviso thereto)
necessary or reasonably requested by Ex-Im Bank or the Facility Agent to
perfect the security interests intended to be created by the Aircraft
Security Documents for such Aircraft shall have been taken;
(xiii) an originally executed certificate of technical acceptance in
respect of such Aircraft executed on behalf of the Initial Lessor (or in
the case of a Delivered Aircraft, the Bridge Owner) pursuant to the
Purchase Agreement accepting such Aircraft from the Manufacturer; and
(xiv) such other documents or evidence with respect to the Initial
Borrower, the Initial Lessee and the Initial Operating Lessee, in each
case, relevant to such Aircraft, the Guarantors, the Engine Manufacturer
and the Manufacturer as Ex-Im Bank or the Facility Agent may reasonably
request in order to establish the consummation of the transactions
contemplated by the Aircraft Financing Documents for such Aircraft, the
taking of all corporate proceedings in connection therewith and compliance
with the conditions herein or therein set forth.
(d) The Security Trustee shall have received the executed original chattel
paper counterpart of each of the Lease, the Initial Operating Lease, the Lease
Supplement and the Acceptance Certificate, in each case for such Aircraft.
(e) Ex-Im Bank and the Facility Agent shall have received the duly
executed original of the Borrowing Date Supplement for such Aircraft dated such
Borrowing Date duly authorized and delivered by the respective parties thereto,
in form and substance satisfactory to Ex-Im Bank and the Facility Agent (in the
case of the Facility Agent, acting reasonably; provided always that
10
if Ex-Im Bank is satisfied with any amendments made to Sections 3, 4 and 5 of
such Borrowing Date Supplement the Facility Agent shall be deemed satisfied with
such amendments), and the representations and warranties set forth therein shall
be true and correct as of such Borrowing Date.
(f) No change in Applicable Laws shall have occurred after the Signing
Date and prior to such Borrowing Date that would make it unlawful for any Person
to execute, deliver or perform any Operative Document to which it is or is to be
a party.
(g) The Initial Operating Lessee of such Aircraft (i) shall have authority
to operate such Aircraft and (ii) shall have commenced or (if such Aircraft is a
Remaining Aircraft), on the Borrowing Date of such Aircraft, will commence, the
leasing of such Aircraft, in either case pursuant to the relevant Initial
Operating Lease.
(h) Each of the Facility Agent, Ex-Im Bank and the Initial Lender shall
have received evidence reasonably satisfactory to it that all Transaction Costs
and other fees and expenses required to be paid on or before such Borrowing Date
under the terms of the Operative Documents shall have been paid in full.
(i) All Taxes then due and payable in connection with the issuance of the
Note relating to such Aircraft shall have been duly paid in full: and (ii) all
sales or use Taxes related to the consummation of the transactions contemplated
by the Operative Documents which are then due and payable shall have been paid
in full.
(j) All appropriate actions (excluding actions required under Section
4B(c)(ii) or which would have be required thereunder but for the proviso
thereto) required to have been taken by any Government Body of any Relevant
Jurisdiction (referable to such Aircraft) prior to such Borrowing Date in
connection with the Aircraft Financing Documents for such Aircraft shall have
been taken, and either (i) all orders, permits, waivers, authorizations,
exemptions and approvals (collectively "PERMITS") of such Government Bodies
(excluding any permits required under Section 4B(c)(ii) or which would have be
required thereunder but for the proviso thereto) required to be in effect on
such Borrowing Date in connection with the transactions contemplated by such
Aircraft Financing Documents shall have been issued, and all such permits shall
be in full force and effect on such Borrowing Date or (ii) arrangements
satisfactory to Ex-Im Bank shall have been made for the issuance of such permits
within any applicable time limit.
SECTION 4C. Further Conditions Precedent to Obligations of Ex-Im Bank:
Utilization Procedures. The obligations of Ex-Im Bank to guarantee the Loan made
with respect to an Aircraft on the Borrowing Date for such Aircraft pursuant to
the terms of the Ex-Im Bank Guarantee shall be subject to satisfaction of the
following additional conditions precedent (in addition to the other conditions
precedent set forth in Sections 4A and 4B):
(a) Ex-Im Bank shall have received a completed fully executed Request for
Guarantee Legend from the Facility Agent at least two (2) Business Days prior to
such Borrowing Date (and the Facility Agent agrees to deliver each such Request
For Guarantee Legend in a timely manner if it shall have received a Notice of
Borrowing for the relevant Loan in a timely manner).
11
(b) Ex-Im Bank shall have received a complete fully executed Request for
Disbursement from the Initial Borrower in respect of such Aircraft at least two
(2) Business Days prior to such Borrowing Date.
(c) Ex-Im Bank shall have received a completed fully executed exporter's
certificate from the Manufacturer in respect of such Aircraft substantially in
the form of Annex 2 to Exhibit A.
(d) Ex-Im Bank shall have received evidence satisfactory to it that the
Ex-Im Bank Exposure Fee in respect of the Loan to be made on such Borrowing Date
has been received by Ex-Im Bank.
(e) Ex-Im Bank shall have received (i) a list setting forth a brief
description of such Aircraft and the invoice price for such Aircraft and (ii) a
copy of the Purchase Agreement (including all waivers, credit memos (including
Engine credits of any sort), amendments, extensions and schedules). Such
Purchase Agreement shall not contravene any applicable statute or public policy
of the United States.
(f) Ex-Im Bank shall have received a duly completed Jurisdictional
Questionnaire reasonably satisfactory to it for the Initial State of
Registration for such Aircraft.
(g) Ex-Im Bank shall have determined, in its sole and absolute discretion,
that no event has occurred from and after December 31, 2001 which could have a
Material Adverse Effect in relation to either or both Guarantors.
(h) Ex-Im Bank shall have determined that any conditions precedent for any
Other Aircraft which, with the consent of Ex-Im Bank were required to be
satisfied on or prior to such Borrowing Date, remain unsatisfied as of such
Borrowing Date, have been satisfied.
(i) All conditions to the Obligations of the Initial Lessee for such
Aircraft under Section 5 have been satisfied or waived.
SECTION 5. Conditions Precedent to Obligations of the Initial Lessee of an
Aircraft. The obligations of the Initial Lessee of an Aircraft contemplated to
be performed on the Borrowing Date for such Aircraft under the Operative
Documents in respect of which it is or will become a party are subject to the
condition that, on or prior to such Borrowing Date, it shall have received
copies of the Operative Documents required to be in existence on such Borrowing
Date (duly authorized, executed and delivered by the respective party or parties
thereto, other than either Guarantor and any Affiliate thereof) and, in
addition:
(a) it shall be satisfied that no change in Applicable Laws shall have
occurred after the date of this Agreement and prior to such Borrowing Date that
would make it unlawful for it or the Initial Borrower or Initial Operating
Lessee of such Aircraft to execute, deliver or perform its obligations under the
Operative Documents to which it is or will become a party; and no event or
circumstance shall have occurred that might result in any Claims;
(b) it shall have received, all in form and substance satisfactory to it,
such evidence (including resolutions and copies of any other organizational
documents) as it or its counsel shall
12
reasonably request as to authorization of the execution, delivery and
performance by each of the parties to the Operative Documents (other than
itself, the Guarantors, each Affiliate thereof and Ex-Im Bank) of such Operative
Documents in respect of the relevant Aircraft and the transactions contemplated
thereby;
(c) it shall be satisfied that no action or proceeding shall have been
instituted or threatened before any Governmental Body, nor shall any order,
judgment or decree have been issued or proposed to be issued by any Governmental
Body, on such Borrowing Date to set aside, restrain, enjoin, or prevent the
completion and consummation of the transactions contemplated by the Operative
Documents in respect of such Aircraft;
(d) it shall have received such other documentation with respect to the
Initial Borrower of such Aircraft and the other parties to this Agreement (other
than the Guarantors, each Affiliate thereof and Ex-Im Bank) as it or its counsel
may reasonably request in order to establish the consummation of the
transactions contemplated by the Operative Documents, the taking of all
corporate proceedings in connection therewith and compliance with the conditions
therein set forth; and
(e) it shall have received each legal opinion referred to (in the case of
the first Borrowing Date) in Section 4A(b)(vi), (other than that opinion
referred to in clause (D) thereof) and (in the case of each Borrowing Date) in
Section 4B(b)(vii) (other than that opinion referred to in clause (E) thereof).
SECTION 6A. Borrower Party. Lessor Party and Lessee Party Designations
(a) GFC's Right to require Designations. GFC may, at any time or from time
to time, designate any Acceptable Person as either (x) a Borrower Party and/or a
Lessor Party or (y) a Lessee Party, in each case hereunder and under the other
Operative Documents, by furnishing to the Facility Agent, Ex-Im Bank and the
Security Trustee a letter (each a "DESIGNATION LETTER"), in substantially the
form of Exhibit C-l, duly completed and executed by GFC, the Person so
designated and its Lessor Parent or Lessee Parent, as the case may be. With
effect from the Designation Date for any designation (a "DESIGNATION") under
this Section 6A:
(i) in the case of an Acceptable Person designated as a Borrower
Party and/or a Lessor Party, such Person shall be and become a "Borrower
Party" and/or a "Lessor Party", as the case may be, for the purposes of
this Agreement and the Loan Agreement and shall have all the rights and
obligations of a "Borrower Party" and/or a "Lessor Party" hereunder and
thereunder;
(ii) in the case of an Acceptable Person designated as a Lessee
Party, such Person shall be and become a "Lessee Party" for the purposes
of this Agreement and the other Operative Documents and shall have all the
rights and obligations of a "Lessee Party" hereunder and thereunder; and
(iii) if the Borrowing Date for any Aircraft has not occurred, such
Person may, if specified in the Notice of Borrowing for such Aircraft, be
the Initial Borrower and/or Initial Lessor or Initial Lessee, as the case
may be, of such Aircraft, otherwise, such
13
Person may be substituted for the Borrower and/or Lessor or Lessee, as
contemplated in Section 6B.
(b) Acceptable Persons. Any Person that is to be designated under Section
6A(a) must meet the following requirements:
(i) it must be an entity organized or incorporated in a jurisdiction
acceptable to Ex-Im Bank in connection with the proposed Designation;
(ii) in the case of a Person designated as a Borrower Party and/or
Lessor Party, it must be owned by (x) a trustee acceptable to Ex-Im Bank
on trust for charitable purposes or (y) any other Person acceptable to
Ex-lm Bank, in either case, in connection with the proposed Designation;
and
(iii) in the case of a Person designated as a Lessee Party, at least
25% of the equity interest in such Person (or such lesser percentage as
Ex-Im Bank may agree in its sole discretion) must be owned, directly or
indirectly, by GFC.
(c) Effectiveness of Designation. Each Designation of an Acceptable
Person shall be effective on the date each of the Facility Agent and Ex-Im Bank
shall have counter-signed the applicable Designation Letter (with respect to
such Designation, the "DESIGNATION DATE"), provided that, subject to Section
6A(d) below, each such Person shall only be obligated to sign such letter if the
following conditions are satisfied:
(i) no Lease Default or Loan Default shall have occurred and be
continuing or would occur upon such Designation becoming effective;
(ii) the representations and warranties of the Lessor Parent or
Lessee Parent (as the case may be) of such Acceptable Person and such
Acceptable Person set forth in such Designation Letter shall be true and
correct in all material respects;
(iii) each of the Facility Agent and Ex-Im Bank shall have received
the following, each in form and substance reasonably acceptable to them:
(A) a Designation Letter duly signed by GFC, an Acceptable
Person and its Lessor Parent or Lessee Parent, as the case may be;
(B) a GATX Guarantee Confirmation in respect of such
Designation duly signed on behalf of the Guarantors;
(C) a Lessor Share Pledge Agreement or a Lessee Share Pledge
Agreement (as appropriate) duly executed by the Lessor Parent or
Lessee Parent (as the case may be) of such Acceptable Person and in
respect of the entire issued share capital of or beneficial interest
in such Acceptable Person;
(D) in the case of an Acceptable Person designated as a
Borrower Party and/or Lessor Party, a Declaration of Trust with
respect to the Lessor Parent;
14
(E) certificates of such Lessor Parent or Lessee Parent, (as
the case may be) and such Acceptable Person, each signed by a duly
Authorized Person thereof, certifying as true and correct (1) its
Constituent Documents, (2) a copy of the minutes of the meeting of
its board of directors at which resolutions were duly adopted
authorizing or ratifying (as appropriate) the execution, delivery
and performance by it of such Designation Letter and (in the case of
such Lessor Parent or Lessee Parent, as the case may be) the
applicable Lessor Share Pledge Agreement or Lessee Share Pledge
Agreement (as the ease may be), (3) the incumbency and specimen
signatures of each Person authorized to execute and deliver such
documents on its behalf and (4) its solvency;
(F) opinions of counsel reasonably acceptable to them in the
jurisdiction of organization of:
(1) such Acceptable Person;
(2) such Lessor Parent or Lessee Parent (as the case may
be);
regarding the participation of such Persons in the transactions
contemplated by the Operative Documents;
(G) evidence that such Lessor Share Pledge Agreement or Lessee
Share Pledge Agreement (as the case may be) has been duly filed in
all places that Ex-Im Bank or the Facility Agent shall have
reasonably requested and all other actions necessary or desirable to
perfect the security interests intended to be created thereby have
been taken; and
(H) such documents, certificates, opinions, filings or other
actions as the Facility Agent or Ex-Im Bank shall have reasonably
required.
(d) Designation Procedures.
(i) Each of the parties hereto agrees to use its reasonable
endeavors, at the request and expense of GFC (including any legal fees of
such party) to take all steps and actions which are necessary or desirable
in connection with any Designation, including:
(A) executing the relevant Designation Letter and executing
any amended and/or restated Operative Documents to give effect to
the Designation;
(B) filing or registering any Operative Document or other
documents with any Government Body,
provided, that GFC has delivered such Designation Letter to such Person
and/or notifies such Person of the step or other action which GFC wishes
such Person to take, in each case, at least 15 Business Days prior to the
date GFC proposes that the Designation be effective (or such lesser period
as the parties may agree), or that such step or action be taken, as the
case may be, and such Person determines, in its sole discretion (in the
case
15
of Ex-Im Bank) and its reasonable discretion (in the case of any other
such Person), that it will not be adversely affected by such Designation,
step or action.
(ii) Each of the Borrower Parties, Lessor Parties and Lessee Parties
from time to time hereby irrevocably authorizes GFC to execute any duly
completed Designation Letter on its behalf provided that such
authorization does not extend to the execution of a Designation Letter on
behalf of any Acceptable Person named therein. The Lenders hereby
irrevocably authorize the Facility Agent to execute any duly completed
Designation Letter on its behalf.
SECTION 6B. Borrower, Lessor and Lessee Substitutions.
(a) GFC's Right to Substitute. GFC may, at any time or from time to time
after the Borrowing Date for any Aircraft, require that the Lessor Party and/or
Borrower Party or Lessee Party (as the case may be) (each, an "EXISTING PERSON")
with respect to such Aircraft, and the Lease, Loan and Note and other Operative
Documents referable thereto, be replaced with another Borrower Party, Lessor
Party or Lessee Party (as applicable) (each, a "REPLACEMENT PERSON"), in each
such case with respect to such Aircraft, Lease, Loan and Note and other
Operative Documents, by furnishing to the Facility Agent, Ex-Im Bank and the
Security Trustee a supplement to the Participation Agreement (each, a
"SUBSTITUTION SUPPLEMENT"), in substantially the form of Exhibit C-2, duly
completed and executed by GFC, such Existing Person and such Replacement Person.
With effect from the Substitution Date for any substitution (each, a
"SUBSTITUTION") under this Section 6B with respect to an Aircraft:
(i) in the case of any Replacement Person to replace an Existing
Person as a Borrower in respect of such Aircraft and/or Lessor of such
Aircraft, and the Lease, Loan, Note and other Operative Documents
referable thereto, such Replacement Person shall be and become the
Borrower and/or Lessor with respect to such Aircraft, Lease, Loan, Note
and other Operative Documents and shall have all the rights and have and
assume all the obligations of "Borrower" and/or "Lessor" under the
Operative Documents with respect to such Aircraft, Lease, Loan, Note and
other Operative Documents (provided, that in the case of any Replacement
Person to replace an Existing Person as a Borrower, such Existing Person
shall continue to have, and shall be a co-obligor in respect of, all the
obligations of "Borrower" and/or "Lessor" under the Operative Documents
with respect to such Aircraft, Lease, Loan, Note and other Operative
Document; and
(ii) in the case of any Replacement Person to replace an Existing
Person as a Lessee of such Aircraft, and the Lease, Loan, Note and other
Operative Documents referable thereto, such Replacement Person shall be
and become the Lessee with respect to such Aircraft, Lease, Loan and Note
and other Operative Documents and shall have all the rights and have and
assume all the obligations of "Lessee" under the Operative Documents with
respect to such Aircraft, Lease, Loan and Note and other Operative
Documents.
(b) Effectiveness of Substitutions. Each Substitution of a Replacement
Person for an Existing Person with respect to an Aircraft, and the Lease, Loan,
Note and the other Operative Documents referable thereto, shall be effective on
the date each of the facility Agent and Ex-Im
16
Bank shall have counter-signed the applicable Substitution Supplement (with
respect to such Substitution, the "SUBSTITUTION DATE"), provided that, subject
to Section 6B(c) below, each such Person shall only be obligated to sign such
letter if the following conditions are satisfied:
(i) no Lease Default or Loan Default shall have occurred and be
continuing or would occur upon such Substitution becoming effective;
(ii) the representations and warranties of such Existing Person and
Replacement Person set forth in such Substitution Supplement shall be true
and correct in all material respects;
(iii) each of the Facility Agent and Ex-Im Bank shall have received
the following, each in form and substance reasonably acceptable to them:
(A) in the case of any Replacement Person to replace an
Existing Person as a Borrower in respect of such Aircraft, GFC and
Ex-Im Bank shall have concluded that the circumstances with respect
to such Aircraft which GFC desires to address by such Substitution
cannot be solved by a substitution of only the Lessee and/or the
Lessor of such Aircraft;
(B) a Substitution Supplement duly signed by GFC, such
Existing Person and such Replacement Person;
(C) a GATX Guarantee Confirmation in respect of such
Substitution duly signed on behalf of the Guarantors;
(D) if Ex-Im Bank shall so require, replacement Aircraft
Security Documents duly executed by such Replacement Person in the
same form mutatis mutandis (subject to Section 8C) as the Aircraft
Security Documents executed by such Existing Person, in each case
with respect to such Aircraft, Lease, Loan or Note;
(E) certificates of such Existing Person and Replacement
Person, each signed by a duly Authorized Person thereof, certifying
as true and correct (1) its Constituent Documents, (2) a copy of the
minutes of the meeting of its board of directors at which
resolutions were duly adopted authorizing or ratifying (as
appropriate) the execution, delivery and performance by it of such
Substitution Letter and (where relevant in the case of such
Replacement Person) the applicable Aircraft Security Documents, (3)
the incumbency and specimen signatures of each Person authorized to
execute and deliver such documents on its behalf and (4) its
solvency;
(F) opinions of counsel reasonably acceptable to them in:
(1) the jurisdiction of incorporation or organization of
such Replacement Person;
17
(2) if not delivered under Section 8C, the State of
Registration of such Aircraft; and
(3) the United States,
regarding their respective participations in the transactions
contemplated by the Substitution Supplement, all other documents to
be concluded in connection therewith and (in the case of such
Replacement Person) the applicable Aircraft Security Documents;
(G) evidence that all applicable Aircraft Security Documents
have been duly and appropriately filed in all places that Ex-Im Bank
or the Facility Agent shall have reasonably requested and all other
actions necessary or desirable to perfect the security interests
intended to be created thereby have been taken; and
(H) such documents, certificates, opinions, filings or other
actions as the Facility Agent or Ex-Im Bank shall have reasonably
required.
(c) Substitution Procedures. Each of the parties hereto agrees to use its
reasonable endeavors, at the request and expense of GFC (including any legal
fees of such party) to take all steps and actions which are necessary or
desirable in connection with any Substitution, including:
(i) executing the relevant Substitution Supplement and executing any
amended and/or restated Operative Documents to give effect to the
Substitution;
(ii) filing or registering any Operative Document or other documents
with any Government Body,
provided, that GFC has delivered such Substitution Supplement to such Person
and/or notifies such Person of the step or other action which GFC wishes such
Person to take, in each case, at least 15 Business Days prior to the date GFC
proposes that the Substitution be effective (or such lesser period as the
parties may agree), or that such step or action be taken, as the case may be,
and such Person determines, in its sole discretion (in the case of Ex-Im Bank)
and its reasonable discretion (in the case of any other such Person), that it
will not be adversely affected by such Substitution, step or action.
SECTION 7. Representations and Warranties of Initial Lessee Parties. Each
Initial Lessee Party hereby represents and warrants in relation to itself as of
the Signing Date (and each representation and warranty shall survive the Signing
Date), that:
(a) It is a company or corporation duly incorporated, organized and
validly existing under the law of its jurisdiction of organization has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and to enter into and perform its
obligations under the Operative Documents theretofore executed or to be executed
by it on such date.
18
(b) Neither the execution and delivery by it of this Agreement or any of
the other Operative Documents theretofore executed or to be executed by it on
such date nor the performance by it of its obligations hereunder or thereunder
requires the consent or approval of, the giving of notice to, or the
registration or filing with, or the taking of any other action, in respect of
its jurisdiction of organization or the United States.
(c) The execution and delivery of this Agreement and the other Operative
Documents executed or to be executed by it on such date, the performance of its
obligations hereunder or thereunder, and its consummation of the transactions
contemplated hereby or thereby, do not require any shareholder approval or
consent of any trustee or holders of any indebtedness of it except such as have
been duly obtained, and will not conflict with or result in any breach of, or
constitute a default under, or result in the creation or imposition of any Lien
(other than Permitted Liens) upon any Aircraft or any of its property or assets
under, any Applicable Laws, its Constituent Documents or any indenture,
mortgage, deed of trust or other instrument or agreement to which it is a party
or by which it may be bound or to which any of its property or assets may be
subject.
(d) The execution, delivery and performance of the Operative Documents
theretofore executed or to be executed by it on such date have been duly
authorized by all necessary corporate action. This Agreement and each other
Operative Document theretofore executed or to be executed by it on such date
constitutes, or upon execution will constitute, its legal, valid and binding
obligation enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(e) It is subject to civil and commercial law with respect to its
obligations under this Agreement and the other Operative Documents to which it
is or will become a party on such date. The making and performance by it of this
Agreement and such other Operative Documents to which it is or will become a
party constitute private and commercial activities rather than governmental or
public activities.
(f) It is not necessary to ensure the legality, validity, enforceability
or admissibility in evidence in its jurisdiction of organization or the United
States of the Operative Documents to which it is or will become a party on such
date that any of them or any other instrument be filed, recorded, registered or
enrolled in any court, public office or that, provided that none of the
Operative Documents are executed in or brought into the Cayman Islands, any
stamp, registration or similar Tax be paid in its jurisdiction of incorporation
on or in relation to any of the Operative Documents to which it is or will
become a party on such date.
(g) It is not in default in any material respect under any agreement to
which it is a party or by which it may be bound, and there are no pending or, to
the best of its knowledge, threatened investigations, judgments, suits or
proceedings in any applicable jurisdiction against it or affecting it or its
properties.
(h) The obligations of it under the Operative Documents to which it is or
is to become a party on such date, are not subject to any law, rule or
regulation of any Relevant Jurisdiction
19
referable to it or any agency or instrumentality thereof with regard to any
preference for payment of obligations or any rescheduling of the payment of any
debt or other obligations, except for applicable bankruptcy, moratorium,
insolvency or other similar laws affecting creditors' rights generally.
(i) Neither it nor any of its assets enjoys any right of immunity,
sovereign or otherwise, or exemption under Applicable Laws on any grounds from
suit, seizure, execution, attachment or other legal process in respect of its
obligations under this Agreement and each Operative Document to which it is, or
is to be, a party; and the execution, delivery and performance of this Agreement
and each Operative Document to which it is or is to be a party constitute its
private and commercial acts.
(j) The choice of New York law to govern this Agreement and each of the
other Operative Documents stated to be governed by New York law to which it is a
party will be recognized and given effect by the courts of the United States and
any Relevant Jurisdiction referable to it and the submission by it to the
jurisdiction of the courts of New York is legal, valid and binding under the
laws of the United States and such Relevant Jurisdiction and will be enforced in
any action brought before a court of competent jurisdiction. A judgment obtained
against it in a court in the State of New York pursuant to service of process
affording actual notice (which would include notice to the relevant Process
Agent in accordance with Section 33(d) of this Agreement) would, whether or not
it has entered an appearance in New York, be enforceable against it by the
courts of its jurisdiction of organization, and the enforcement of any such
judgment would not be contrary to the laws or public policy of its jurisdiction
of organization.
(k) The full and correct legal name, type of organization, jurisdiction of
organization, organizational ID number (if applicable) and mailing address of
such Initial Lessee Party is set forth in Schedule 6.
SECTION 8A. General Covenants of each Lessee Party. Each Lessee Party
covenants and agrees with each other party hereto as follows:
(a) It shall (i) preserve and maintain its legal existence and all of its
material rights, privileges and franchises, (ii) maintain its corporate
existence under and in compliance with all Applicable Laws, (iii) conduct its
business in all material respects in accordance with all Applicable Laws and
regulations binding on it and its operations or assets, and (iv) promptly
provide Ex-Im Bank, the Facility Agent and the Security Trustee with such
financial and other information concerning its or a Lessor's affairs as Ex-Im
Bank or the Security Trustee may from time to time reasonably request in
connection with the transactions contemplated by this Agreement and any other
Operative Document to which it is a party.
(b) It shall not enter into any business or other activity other than (i)
the transactions contemplated hereunder; and (ii) activities incidental to the
foregoing.
(c) It shall not, to the extent it may lawfully so agree, (i) commence any
case, proceeding or other action under any existing or future law of any
jurisdiction, within or outside any Relevant Jurisdiction referable to it,
relating to bankruptcy, insolvency, examinership,
20
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, (ii) seek
appointment of a receiver, trustee, examiner, custodian or other similar
official for it or for all or any substantial part of its assets, or make a
general assignment for the benefit of its creditors, or (iii) take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth above.
(d) It shall not, to the extent it may lawfully so agree, consolidate with
or merge into any other Person or convey, transfer or lease all or any material
part of its assets to any Person, whether in a single transaction or a series of
transactions, except as expressly permitted by the Operative Documents and so
long as any such transaction does not give rise to a Lease Event of Default
under any Lease to which it is a party or any Claim which any Lessee is not
obligated to indemnify hereunder.
(e) It shall, as promptly as practicable, provide to Ex-Im Bank, the
Facility Agent and the Security Trustee such information as may be reasonably
requested by Ex-Im Bank, the Facility Agent or the Security Trustee in order to
comply with any request or requirement for information in respect of any of the
Aircraft for which it is Lessee by any Government Body.
(f) Promptly after it knows that any Lease Event of Default under any
Lease to which it is a party has occurred, it will provide the Lessor for such
Aircraft, Ex-Im Bank, the Facility Agent and the Security Trustee with a notice
of such Lease Event of Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible, a description of
the action it has taken or proposes to take with respect thereto.
(g) During the Term with respect to any Aircraft for which it is Lessee,
neither it, nor anyone claiming through it or under it, shall set up, claim or
seek to take advantage of any law now or hereafter in force in any jurisdiction
where any such Aircraft may be situated in order to prevent, hinder or delay any
effort on the part of the relevant Lessor, Ex-Im Bank, the Facility Agent or the
Security Trustee to de-register such Aircraft, regain possession of such
Aircraft, or re-export such Aircraft from any jurisdiction in which such
Aircraft may be located upon the occurrence of an Event of Default, and it, for
itself and all who may at any time claim through or under it, hereby waives, to
the full extent that it may be lawful so to do, the benefit of all such laws;
provided, that, for the purposes of this Section 8A(g), an Operating Lessee of
such Aircraft under a Quiet Enjoyment Operating Lease shall not be a Person
claiming through or under such Lessee.
(h) Without limitation of its obligations under Section 10, it will pay
and discharge any and all Taxes imposed on it or its income or profits or on any
of its assets, prior to the date on which penalties attach thereto, except that
it shall not be required to pay any such Taxes (a) the payment of which is being
contested diligently in good faith and by proper proceedings that do not involve
either any potential for criminal liability or the imposition of any Lien for
which an adequate bond has not been posted by it, and against which it is
maintaining adequate cash reserves in accordance with generally accepted
accounting principles in its jurisdiction of organization, or (b) which,
together with all related interest and penalties, would, if unpaid, not result
in any material adverse change in its financial condition, in either case so
long as such non-payment does not involve any substantial risk of the sale,
seizure, forfeiture or loss of any Airframe or any Engine.
21
(i) In respect of each Aircraft for which it is Lessee, it shall pay or
caused to be paid all stamp duties, recordation taxes with respect to any
Operative Document required to be paid in any State of Registration for such
Aircraft, Aircraft registration taxes in any such State of Registration,
acquisition tax in such State of Registration, property taxes and surtaxes
thereon in such State of Registration and any taxes imposed under the laws of
the any Relevant Jurisdiction referable to it, in each case in connection with
each such Aircraft, the related Lease, the related Sublease, if any, the GATX
Guarantee, any Operating Lease for such Aircraft, the Operating Lessor Security
Assignment and the other Operative Documents to which it is a party.
(j) In respect of each Aircraft for which it is Lessee, it shall provide
the relevant Lessor, Ex-Im Bank, the Facility Agent and the Security Trustee
written notice, promptly after it becomes aware, of the commencement of any and
all litigation or arbitral proceedings not covered by insurance (except for
deductibles standard to the airline industry) and of all proceedings in any
jurisdiction:
(i) which might, in its reasonable judgment, have a Material Adverse
Effect on Lessor's title, ownership or other interest in such Aircraft;
(ii) which might, in its reasonable judgment, have a Material
Adverse Effect on the Liens on such Aircraft constituted by the Security
Documents relating to such Aircraft;
(iii) which might, in its reasonable judgment, have a Material
Adverse Effect on any other Liens constituted by the Security Documents
relating to such Aircraft; or
(iv) which might, in its reasonable judgment, have a Material
Adverse Effect on its ability to perform its obligations under this
Agreement, the Lease for such Aircraft, the Sublease (if any) for such
Aircraft, any Operating Lease for such Aircraft or the other Operative
Documents to which it is a party.
(k) It shall comply with any and all of its covenants and agreements
contained in the Operative Documents, whether as Lessee Party, Lessee, Sublessee
or Operating Lessor, as the case may be.
SECTION 8B. Covenants of each Lessee relating to the Aircraft Financing
Documents.
(a) Except as may be agreed in writing to the contrary by Ex-Im Bank as
(whether as contemplated by Section 8B(b) or otherwise), each Lessee Party
covenants and agrees with-each other party hereto as follows:
(i) It (at its own or GFC's cost and expense) will cause, in respect
of each Aircraft for which it is Lessee or Sublessee, the Operating Lease,
the Security Documents to which it is a party and any other appropriate
documents reasonably requested by Ex-Im Bank, the Facility Agent or the
Security Trustee to be promptly filed and recorded, or filed for
recording, to the extent permitted under Applicable Laws of the State of
Registration of such Aircraft or any other Relevant Jurisdiction
(referable to such Aircraft). It (at its own or GFC's cost and expense)
will promptly execute and deliver any document or instrument reasonably
requested by Ex-Im Bank, the Facility Agent or the
22
Security Trustee and otherwise fully cooperate with Ex-Im Bank, the
Facility Agent and the Security Trustee in a timely manner in connection
with the filing and recordation of each Security Document and, to the
extent permitted by Applicable Laws, any supplement thereto, with the
Civil Aviation Authority and Governmental Bodies of such State of
Registration or any other such Relevant Jurisdiction, as appropriate.
(ii) It (at its own or GFC's cost and expense) shall (i) execute,
acknowledge, deliver, file, notarize and register all such further
agreements, instruments, certificates, documents and assurances, and
perform such acts as any Lessor, Ex-Im Bank, the Facility Agent or the
Security Trustee may consider reasonably necessary to effectuate the
purposes of this Agreement and the other Operative Documents to which it
is a party, (ii) promptly obtain from time to time and maintain in full
force and effect all such governmental licenses, authorizations, consents,
permits and approvals under Applicable Laws as may be required to enable
it to comply with its obligations under this Agreement and the other
Operative Documents to which it is a party and (iii) promptly provide any
Lessor, Ex-Im Bank, the Facility Agent and the Security Trustee with
evidence of the foregoing reasonably satisfactory in form and substance to
such Lessor, Ex-Im Bank, the Facility Agent and the Security Trustee.
(iii) With respect to each Aircraft for which it is Lessee or
Sublessee, it shall be responsible (at its own or GFC's cost and expense)
for recording and re-recording, registering and re-registering and filing
and re-filing of (1) the Lease, the Sublease (if any), any Operating
Lease, the Aircraft Mortgage, the Local Mortgage, the Operating Lessor
Security Assignment, each other Security Document, in each case, relating
to such Aircraft, and each and every amendment and supplement to any
thereof and (2) such other instruments from time to time as may be
reasonably requested by the Lessor for such Aircraft, Ex-Im Bank, the
Facility Agent or the Security Trustee, in each case in all Relevant
Jurisdictions relating to such Aircraft as such Lessor, Ex-Im Bank, the
Facility Agent or the Security Trustee shall from time to time reasonably
require in order that (x) the rights of Lessor in respect of such Aircraft
and such Lease, (y) the Lien of such Aircraft Mortgage, Local Mortgage (if
any) and other Security Documents, and (z) the rights, priorities,
perfection and remedies of the parties hereto under the Operative
Documents referable to such Aircraft may be established, confirmed,
maintained and protected in each such Relevant Jurisdiction; and it shall
furnish to such Lessor, Ex-Im Bank, the Facility Agent and the Security
Trustee reasonably satisfactory evidence of every such recording,
registering and filing.
(iv) With respect to each Aircraft for which it is Lessee or
Sublessee, it shall at all times ensure that the Security Trustee shall
have a first priority and perfected Lien on such Aircraft, and the other
collateral comprising the Trust Estate in each Relevant Jurisdiction
(referable to such Aircraft).
(v) If, in respect of any Aircraft, at any time after the Borrowing
Date in relation to such Aircraft and prior to the Secured Obligations in
respect of such Aircraft having been paid or satisfied in full, the
relevant State of Registration shall execute and ratify the Cape Town
Convention and the Cape Town Convention shall be in full force and effect
in the jurisdiction of the State of Registration, the relevant Lessee
shall, upon
23
the request of the Security Trustee but at the expense of the relevant
Lessee or GFC, cause any and all of the interests created by the Operative
Documents which constitute an International Interest in relation to such
Aircraft to be duly registered in accordance with the provisions of the
Cape Town Convention and shall cause all other filings and recordings and
all such other action required under the Cape Town Convention to be
effected and taken, in order to protect and perfect the respective right,
title and interests of the Secured Parties thereunder.
(b) If the cost of complying with any obligation under Section 8B(a),
8C(c) or 8E(f) (whether in respect of registration fees, stamp duty, notarial
fees or otherwise) in respect of an Aircraft is more than nominal, GFC may
notify Ex-Im Bank in writing, specifying the nature of the obligation and cost
of compliance and the alternative course of action it desires to take or cause
the Lessee for such Aircraft to take, as the case may be ("REGISTRATION WAIVER
REQUEST"). Following receipt by Ex-Im Bank of a Registration Waiver Request,
Ex-Im Bank agrees to consult with GFC with respect to such Registration Waiver
Request as to whether, and what conditions, if any, the relevant obligation(s)
may be waived; provided, that Ex-Im Bank's failure to consult with GFC shall not
affect Ex-Im Bank's, GFC's or such Lessee's rights and obligations hereunder.
Without limiting the previous sentence, any such consultation may have regard
to, among other things, (1) the provisions of the Jurisdictional Questionnaire
in respect of the State of Registration of such Aircraft and (2) whether
reputable counsel in such State of Registration can confirm that the rights of
the Security Trustee to terminate the relevant Lease and repossess the Aircraft
pursuant to the assignment of such Lease pursuant to the Aircraft Mortgage for
such Aircraft and the relevant Operating Lessor Security Assignment gives at
least equivalent protection as such rights the Security Trustee would have
enjoyed if such Aircraft Mortgage (as the case may be) had been registered. If
Ex-Im Bank responds to a Registration Waiver Request it shall do so in writing.
SECTION 8C. Certain Covenants Relating to the Re-leasing of Aircraft.
(a) New Operating Leases. From the Borrowing Date for an Aircraft such
Aircraft will be subject to the Initial Operating Lease for such Aircraft.
Subject to the terms and conditions set forth in this Section 8C, prior to the
scheduled expiration, and following the expiration or any early termination, of
the Operating Lease Period under the Initial Operating Lease or any subsequent
Operating Lease for such Aircraft, GFC will endeavour to procure that a Lessee
Party (as a Lessee or a Sublessee) concludes a new Operating Lease for such
Aircraft to begin as soon as practicable after such expiry or other termination
of such Operating Lease Period and shall ensure that, except as otherwise agreed
by Ex-Im Bank:
(i) any such new Operating Lease will contain provisions which
conform to the Minimum Lease Provisions;
(ii) without limiting (i), any such new Operating Lease must
otherwise be in such form as is consistent with the Standard;
(iii) any such new Operating Lease does not contain terms which
would prevent it or the relevant Lessee or Borrower from being able
to comply with its obligations under the Operative Documents;
24
(iv) any such new Operating Lease must be with an Eligible Operating
Lessee (or expressly provide that the leasing under such new Operating
Lease may not commence until such lessee is an Eligible Operating Lessee);
(v) any rental payments, maintenance reserves, security payments or
other amounts payable by the new Operating Lessee in respect of the
leasing of the Aircraft are expressed to be payable under and pursuant to
the Operating Lease; and
(vi) the entry of such new Operating Lease will not, having regard
to the Other Operating Leases, be inconsistent with the Home Country
Rules.
Irrespective of any Operating Lease entered into for, or in the event that
no new Operating Lease is entered into following the termination or expiry of
any Operating Lease Period for, an Aircraft, the relevant Lessee shall remain
primarily liable hereunder, under the Lease for such Aircraft and the other
Operative Documents to which it is a party.
(b) Notice. As soon as such information is available, but no later than
(i) two (2) Business Days prior to entering into any new Operating Lease for an
Aircraft, GFC will provide Ex-Im Bank and the Facility Agent with written notice
of the Operating Lease Particulars; and (ii) ten (10) Business Days (or such
fewer number of days as may, upon request by GFC, be agreed by Ex-Im Bank) prior
to entering into any new Operating Lease, GFC will provide Ex-Im Bank with a
duly completed Jurisdictional Questionnaire with respect to the proposed State
of Registration, provided, that, no such Jurisdictional Questionnaire shall be
required if: (A) the proposed State of Registration is the same as the existing
State of Registration for such Aircraft. (B) unless Ex-Im Bank requests it, GFC
has submitted a Jurisdictional Questionnaire in respect of such proposed State
of Registration for such Aircraft or any Other Aircraft within the previous 12
months, or (C) Ex-Im Bank notifies GFC that it is not necessary. To the extent
Ex-Im Bank has a Jurisdictional questionnaire or similar document for the
proposed State of Registration which is not confidential to any other Person, it
will use reasonable endeavors to provide such questionnaire to GFC for updating
by the Local Counsel referable to such Aircraft, provided that Ex-Im Bank will
not be liable for any failure to so provide such a questionnaire and any such
failure will shall not limit GFC's or any Lessee's obligations under this
Section 8C or any other Operative Document.
(c) Conditions Precedent. Provided no Material Default has occurred and is
continuing with respect to the Lease for such Aircraft, the Lessee or Sublessee
of an Aircraft may enter into and commence the leasing of such Aircraft pursuant
to a new Operating Lease if:
(i) the Operating Lessee thereunder has provided insurance
certificates and letters of undertaking evidencing compliance with its
insurance covenants and undertakings under such new Operating Lease;
(ii) Except as may be agreed to the contrary by Ex-Im Bank as
provided in Section 8B(b):
(A) the priority, validity and enforceability of the relevant
Aircraft Mortgage and will not be adversely affected by such leasing
or, without prejudice to clause (vi) below, such Aircraft Mortgage
so far as it relates to such Aircraft is
25
replaced by, or supplemented with a new mortgage in such form and
substance as may be required by the Security Trustee and the
Facility Agent to give the Secured Parties a first priority Lien or,
with the consent of Ex-Im Bank, the best security position available
within any Relevant Jurisdictions (referable to such Aircraft),
having regard to, among other things, the duly completed
Jurisdictional Questionnaire for the relevant State of Registration;
(B) all appropriate steps have been taken to ensure the
continued first priority, validity and enforceability of the
relevant Aircraft Mortgage, any such new or supplemental mortgage
and each of the other Security Documents, or amendments or
replacements thereto satisfactory to the Instructing Group are made
to ensure such continued first priority, validity and
enforceability;
(iii) such Aircraft remains registered with the Civil Aviation
Authority with which it is registered immediately prior to commencement of
such Operating Lease or is reregistered with the Civil Aviation Authority
of the jurisdiction in which the proposed Operating Lessee has actual
possession or operational control of the Aircraft or (with the prior
written consent of Ex-Im Bank, acting reasonably), such other Civil
Aviation Authority as GFC considers appropriate in accordance with the
Standard) in the name of the relevant Lessor as owner, the relevant Lessee
and (if any) the relevant Sublessee, as sublessor, as the case may be, and
such new Operating Lessee as operator, with the Security Trustee's
interest noted (in each case to the extent permitted by Applicable Law);
(iv) the Guarantors have provided a GATX Guarantee Confirmation in
respect of such Aircraft;
(v) in the case of any proposed Quiet Enjoyment Operating Lease,
or any Subject and Subordinate Operating Lease involving a change in the
State of Registration, the Security Trustee has received (except to the
extent otherwise agreed by Ex-Im Bank under Section 8B(b)) an opinion from
counsel selected by GFC and approved by the Instructing Group (such
approval to be considered promptly and not to be unreasonably withheld)
addressed to the relevant Lessor, relevant Lessee, the Security Trustee,
Ex-Im Bank and the Facility Agent in terms reasonably satisfactory to the
Instructing Group:
(A) to the effect that the interests of the relevant Lessor,
as owner of the Aircraft, and the Security Trustee, as mortgagee,
and (in the case of a Quiet Enjoyment Operating Lease) assignee of
the relevant Quiet Enjoyment Operating Lease (or, in the case that
such counsel opines that, as a matter of law, the jurisdiction where
registration or re-registration of the Aircraft is sought does not
recognize and will not enforce the rights of a mortgagee as such, to
the effect that (1) the interests of the Security Trustee as holder
of rights and remedies substantially similar to those of the
Security Trustee as mortgagee in other jurisdictions where the
Aircraft Mortgage is recognized as legal, valid and enforceable,
including without limitation the right to sell, assign or otherwise
transfer the owner's interest in the Aircraft to satisfy any
obligations secured by the Aircraft Mortgage subject to the terms
and conditions of the Aircraft
26
Mortgage) will be recognized and will be legal, valid and
enforceable in the jurisdiction of the relevant Operating Lessee,
(2) the Security Trustee, as mortgagee or holder of equivalent
security over the Aircraft will, at least to the best of such
counsel's knowledge and belief, be able to recover possession of the
Aircraft (subject to the rights of an Operating Lessee under a Quiet
Enjoyment Operating Lease for such Aircraft) upon enforcement of the
Aircraft Mortgage or equivalent security and (3) any necessary
filings, registrations or other formalities have, so far as possible
in such jurisdiction, been performed and observed in order to
protect and perfect, (w) the interests of such Lessor in the
Aircraft, (x) the first priority security interest in the Aircraft
created under the Aircraft Mortgage and (y) in the case of a Quiet
Enjoyment Operating Lease, the first priority security interest in
such Quiet Enjoyment Operating Lease);
(B) to the effect that the obligations of the Operating
Lessee under the relevant Operating Lease are its legal, valid and
binding obligations enforceable in accordance with their terms under
the laws of its jurisdiction ranking at least pari passu with all
unsecured unsubordinated Indebtedness of such Operating Lessee
(subject only to standard bankruptcy or equity exceptions), and
(C) to the extent not dealt with in the Jurisdictional
Questionnaire provided under Section 8C(b) or in the event no
Jurisdictional Questionnaire is provided, identifying the legal
requirements which will need to be followed or observed in order for
the Aircraft to be deregistered and exported from the relevant
country following the expiration or termination of the Operating
Lease Period pursuant to the relevant Operating Lease;
(vi) in any case involving a change in the State of Registration,
neither the Security Trustee nor Ex-Im Bank has notified GFC that the
Instructing Group is of the view that matters covered by the
Jurisdictional Questionnaire or the formalities identified in the opinion
referred to in clause (v) above are not reasonably satisfactory to it as
to matters concerning the procedures for repossessing, de-registering and
re-exporting the Aircraft or are materially prejudicial to the rights and
interests of the Security Trustee or the Secured Parties;
(vii) in the case of any Subject and Subordinate Operating Lease,
the Security Trustee has received an opinion from counsel selected by GFC
and approved by the Instructing Group (such approval to be considered
promptly and not to be unreasonably withheld) addressed to the relevant
Lessor, Ex-Im Bank, the Security Trustee and the Facility Agent and in
terms reasonably satisfactory to the Instructing Group prior to the date
such Operating Lease becomes binding on Operating Lessor and proposed date
of delivery of the Aircraft under such Subject and Subordinate Operating
Lease:
(A) to the effect that the subject and subordinate
provisions set forth therein are effective and binding on the
relevant Operating Lessee and as a consequence the relevant
Operating Lessee will have no rights at law to interfere with the
termination of the leasing of the Aircraft in the circumstances
expressly contemplated by such subject and subordinate provisions,
and
27
(B) to the effect that the interests of the relevant Lessor,
as lessor of the Aircraft, and of the Security Trustee, as
mortgagee, will not, as a matter of law, be interfered with by such
Subject and Subordinated Operating Lease; and
(viii)GFC has delivered to the Security Trustee (1) (if such new
Operating Lease is a Quiet Enjoyment Lease Agreement) in relation to such
new Operating Lease a copy of such new Operating Lease and an Operating
Lessee Consent, and (2) unless otherwise agreed by Ex-Im Bank, an
Assignment of Insurances, duly executed by the proposed Operating Lessee.
(d) Conditions Subsequent. Upon or, if not available, as soon as
reasonably practicable after the commencement of the leasing of an Aircraft
pursuant to an Operating Lease, GFC will provide to the Security Trustee:
(i) copies of the current Certificate of Airworthiness and
Certificate of Registration issued by the Civil Aviation Authority for
such Aircraft; and
(ii) a copy of such new Operating Lease and, if the Instructing
Group shall so request, copies of the conditions precedent delivered by
the relevant Operating Lessee pursuant to such new Operating Lease.
(e) Discussions. GFC agrees it will, if contacted by Ex-Im Bank or its
legal counsel, discuss in good faith with Ex-Im Bank and its legal counsel:
(i) the progress of its efforts to conclude a new Operating Lease
for any Aircraft in accordance with this Section 8C;
(ii) the proposed principal terms and conditions of any proposed
new Operating Lease for such Aircraft; and
(iii) the steps that should or can be taken to ensure that, in
connection with the entering into of a new Operating Lease for such
Aircraft and the commencement of leasing of such Aircraft thereunder, the
Aircraft Mortgage on or in respect of such Aircraft can remain effectively
secured in accordance with clause (c)(ii) above.
(f) Co-operation. Each of the Facility Agent and the Security Trustee
agrees to take at GFC's cost such action as GFC may reasonably request in
connection with a new Operating Lease which is permitted hereunder.
(g) Subleasing or Re-registration. Except as otherwise permitted by any
of the Operative Documents, none of GFC, any Lessee Party or any Lessor Party
may, without the consent of Ex-Im Bank and the Security Trustee, (i) lease, or
cause any Lessee to lease any Aircraft to any Person other than an Operating
Lessee or a Lessee Party, (ii) lease, or cause any Sublessee to lease, any
Aircraft to any Person other than an Operating Lessee, (iii) permit any
Operating Lessee to lease any Aircraft to any Person unless such Person is an
Eligible Operating Lessee, and (iv) permit any Operating Lessee to register any
Aircraft in a jurisdiction other than the State of Registration applicable to
such Operating Lessee at the commencement of its Operating Lease, unless the
provisions of this Section 8C are complied with in respect of such
28
re-registration at such time, determined as if such re-registration were in
connection with a new Operating Lessee to such Operating Lessee.
SECTION 8D. Certain Covenants of each Lessee relating to Operational
Undertakings; Inspection; Registration; Nameplates and Insurance.
(a) Operational Replacement of Parts, Alterations, Modifications and
Additions Undertakings. Each Lessee Party shall, in respect of each Aircraft for
which it is the Lessee or Sublessee:
(i) during any period such Aircraft is Off-Lease, carry out, or
procure that there is carried out, in relation to such Aircraft, (A) the
Operational Undertakings as set forth in Schedule 3, and (B) the
Replacement of Parts, Alterations, Modifications and Additions
Undertakings as set forth in Schedule 4; and
(ii) at all times during the Term for such Aircraft, manage or
cause GFC to manage, as an operating lessor, such Aircraft and any
Operating Lease for the Aircraft, monitor the applicable Operating
Lessee's performance of the terms and conditions thereof and take such
action before and after an Operating Lease Default or Operating Lease
Event of Default as it considers reasonably necessary (in accordance with
the Standard), provided that at any such time as a Lease Event of Default
has occurred and is continuing, only the Security Trustee may declare an
Operating Lease Event of Default and take any actions consequent after an
Operating Lease Event of Default; and
(iii) at all times during the Term for such Aircraft, shall comply
with or cause to be complied with each Airworthiness Directive issued from
time to time applicable to such Aircraft on or prior to the later of (A)
the date by which the same is required to be carried out and (B) if the
Operating Lessee for such Aircraft fails to cause compliance by the time
referred to in clause (A), as soon as possible after such Aircraft is
Off-Lease.
(b) Inspection. Each Lessee Party shall, in respect of each Aircraft for
which it is the Lessee or Sublessee, permit, and cause each Operating Lessee of
such Aircraft to permit, any qualified appraiser designated in writing by the
Instructing Group to visit and inspect (at any reasonable time; provided that
such inspection (i) shall not interfere with such Lessee's or Operating Lessee's
operational commitments and (ii) unless a Lease Event of Default has occurred
which is continuing, will not take place more than once a year) such Aircraft,
its condition, use and operation and the records maintained in connection
therewith and to make copies of such records as the Instructing Group may
reasonably designate. Neither the Security Trustee nor any other Secured Party
shall have any duty to make any such inspection and shall not incur any
liability or obligation by reason of not making any such inspection. Any costs
incurred by the Instructing Group pursuant to this Section 8D(b) in respect of,
for each Aircraft, one such inspection per annum or, for any or all Aircraft, at
a time when a Lease Event of Default has occurred and is continuing, shall be
for the account of the Lessee or GFC. During any period such Aircraft is
Off-Lease such Lessee shall, and at all other times Lessee shall use all
reasonable efforts to, furnish the Instructing Group with such information
concerning the location, condition, use and operation of such Aircraft as the
Security Trustee may reasonably request.
29
(c) Registration. Each Lessee Party shall, in respect of each Aircraft
for which it is the Lessee or Sublessee:
(i) at all times during any period such Aircraft is Off-Lease,
unless the Aircraft is imminently scheduled for major maintenance or
modification or as otherwise agreed by the Instructing Group, ensure that
the Aircraft shall be registered in the United States of America, Ireland,
the Seychelles, Bermuda or any other jurisdiction acceptable to the
Instructing Group (acting reasonably), and the Lessor for such Aircraft
will undertake, at such Lessee's or GFC's cost, all lawful actions
reasonably requested in writing by such Lessee or GFC which are necessary
to ensure the Aircraft is so registered; and
(ii) at all times during any period such Aircraft is not Off-Lease,
cause the Aircraft to be duly registered under the laws of the State of
Registration for such Aircraft and, except as otherwise provided in
Section 8C, to remain duly registered under the laws of the State of
Registration (and the Lessor for such Aircraft will undertake all lawful
actions requested in writing by such Lessee or GFC which are necessary to
permit such registration to be so maintained), and shall not, except as
otherwise provided in Section 8C or 8D(c)(i), register the Aircraft under
the laws of any country other than the State of Registration.
(d) Insurance. In respect of each Aircraft for which it is the Lessee or
Sublessee, each Lessee Party shall at all times cany out, or procure that there
is carried out, in relation to such Aircraft, the Insurance Undertakings as set
forth in Schedule 5.
SECTION 8E. Certain Covenants of GFC, Lessees and Lessors relating to
Modifications to Leases and Operating Leases and the Disposition of Aircraft.
(a) No Modification of Leases Etc. None of GFC, any Lessee or any
Lessor, may, without the consent of Ex-Im Bank and the Security Trustee, amend,
waive, vary, alter or modify (each, a "MODIFICATION"), or give any approval,
consent or permission to any Modification of:
(i) any Lease or any provision thereof, to which it is a party,
except as permitted in Section 8E(c) in connection with the sale of an
Aircraft;
(ii) any Sublease to which it is a party in any manner that would
result in the rights of the Sublessee not being subject and subordinate to
the rights of the applicable Lessor and the Security Trustee in such
Aircraft under the Operative Documents; or
(iii) any Operating Lease to which it is a party, if the effect of
such Modification would be that such Operating Lease would not meet the
requirements for a new Operating Lease as set forth in Section 8C(a) and
8C(c).
Save as provided to the contrary in this Section 8B(a), for as long as no
Lease Event of Default has occurred which is continuing, each Lessee may amend,
waive, vary, alter or modify, and agree to amend, waive, vary, alter or modify,
any Sublease or Operating Lease to which it is a party.
30
(b) No New Operating Leases. None of GFC, any Lessee or any Lessor may,
without the consent of Ex-Im Bank and the Security Trustee, enter into,
conclude, or commence the leasing, subleasing or sub-subleasing of any Aircraft
under, any lease, agreement or other arrangement, except as permitted under
Section 8C.
(c) No Sale of Aircraft. Except as otherwise permitted by any of the
Operative Documents, none of GFC, any Lessee or any Lessor may, without the
consent of Ex-Im Bank and the Security Trustee, sell, transfer, assign, lease or
otherwise dispose of (each, a "DISPOSITION"), its interest in any Aircraft,
Engine or Part, any Lease, Sublease or Operating Lease or any other item of
Collateral (including any Disposition in connection with any enforcement of
remedies under any Lease, Sublease or Operating Lease), provided, that any such
Person may cause a Disposition of an Aircraft if each of the following
conditions is satisfied: (i) no Lease Default or Loan Default has occurred and
is continuing at the time of such Disposition, (ii) upon or prior to such
Disposition, the Loan for such Aircraft, together with all other amounts due and
owing to the Secured Parties under the Operative Documents are paid in
accordance with Section 2.4 of the Loan Agreement and (iii) either (A) in the
case of the first four Aircraft to be the subject of a Disposition, GFC has
provided a Non-Discrimination Certificate to Ex-Im Bank or (B) in the case of
any Aircraft, immediately following the Disposition of such Aircraft, the LTV
Ratio for the Other Aircraft (established on the basis of an Appraised Value
determined as of a date occurring not more than sixty (60) days prior to the
date of such Disposition) is no more than 77% (as established by a copy of the
relevant Appraisal of the Other Aircraft).
SECTION 8F. General Covenants of GFC. Without limiting the GATX Guarantee,
GFC covenants and agrees with each other party hereto as follows:
(a) It shall cause each Lessee Party, Borrower Party and Lessor Party to
observe or perform all of its covenants, obligations and undertakings under the
Operative Documents; provided, that each such Person's obligations, if any, to
re-imburse GFC, and GFC's recourse against each such Person, for any amounts
paid by GFC on behalf of such Person shall be as provided in Sections 30 and 32.
(b) It shall provide to Ex-Im Bank, the Facility Agent and the Security
Trustee copies of (x) audited financial statements of the Guarantors for the
financial year ended as of December 31,2002 and for each financial year
thereafter as soon as they are available but in any event not later than 120
days after the close of the relevant financial year and (y) the Guarantors'
unaudited semi-annual financial statements to the extent available as soon as
they are available but in any event not later than sixty (60) days after the
close of the relevant period. Each financial statement provided hereunder shall
have been prepared in accordance with GAAP consistently applied and shall be in
English and shall be accompanied by a certificate of an Authorized Officer of
GFC stating that, based on an examination sufficient to enable such officer to
make an informed statement, no Lease Default has occurred and is continuing
under any Lease or, if such is not the case, specifying such Lease Default and
its nature, when it occurred and the steps being taken by GFC with respect
thereto.
(c) It shall, as promptly as practicable, provide to Ex-Im Bank, the
Facility Agent and the Security Trustee such information as may be reasonably
requested by Ex-Im Bank, the
31
Facility Agent or the Security Trustee in order to comply with any request or
requirement for information in respect of any of the Aircraft by any Government
Body.
(d) Promptly after it knows that any Lease Event of Default has
occurred, it will provide the Lessor for such Aircraft, Ex-Im Bank, the Facility
Agent and the Security Trustee with a notice of such Lease Event of Default
describing the same in reasonable detail and, together with such notice or as
soon thereafter as possible, a description of the action it has taken or
proposes to take with respect thereto.
(e) Except as otherwise agreed by Ex-Im Bank pursuant to Section 8B(b),
it shall take, or shall cause to be taken, such action with respect to the
Lessee Share Pledge Agreements and the Lessor Share Pledge Agreements as is or
may be necessary (in the reasonable opinion of Ex-Im Bank or the Facility
Agent), or that the Facility Agent, the Security Trustee or Ex-Im Bank may from
time to time request to establish, protect, preserve and/or perfect the Lien
created thereby and will furnish to the Facility Agent, the Security Trustee and
Ex-Im Bank prompt notice of the necessity of any such action, together with such
instruments, in execution form, and such other information as may be required to
enable the Facility Agent, the Security Trustee or Ex-Im Bank to take such
action.
SECTION 8G. Additional Security.
(a) On the Borrowing Date for an Aircraft, the relevant Borrower shall
pay the Security Amount for such Aircraft to the Trust Company to be held by the
Trust Company in the Security Account in accordance with the provisions of
Section 8G and Section 13(k).
(b) Grant of Additional Security. To secure the Secured Obligations,
each Borrower hereby assigns and pledges to the Security Trustee for the benefit
of the Secured Parties, and hereby grants to the Security Trustee for the
benefit of the Secured Parties a security interest in, all of its right, title
and interest in and to the Account Collateral.
(c) Remedies. If an Event of Default shall have occurred and be
continuing:
(i) The Security Trustee may exercise in respect of the Account
Collateral, in addition to other rights and remedies provided for herein,
all the rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to such Collateral).
(ii) All cash proceeds on deposit in the Security Account or
received by the Security Trustee in respect of any sale of, collection
from, or other realization upon all or any part of the Account Collateral
may, in the discretion of the Security Trustee, be held by the Security
Trustee as collateral for, and/or then or at any time thereafter applied
in whole or in part by the Security Trustee for the benefit of the Secured
Parties against, all or any part of the Secured Obligations in accordance
with Section 21.
(d) Scheduled Release of Account Collateral. On each Release Date,
provided that no Lease Default or Loan Default has occurred and is continuing on
such date (and GFC has provided the Security Trustee with a certificate to that
effect from an Authorized Officer), the
32
Security Trustee shall direct the Trust Company to pay, and the Trust Company
shall pay, to GFC, on behalf of the Borrowers from the Security Account the
lesser of:
(i) (A) in the case of any Release Date (other than the Final
Release Date), the Scheduled Release Amount plus all Investment Earnings,
if any, on investments of funds on deposit in the Security Account that
have accrued since the immediately preceding Release Date (or, in the case
of the First Release Date, since the first Borrowing Date); and
(B) in the case of the Final Release Date, the balance of the
Security Account, and all Investment Earnings on investments of funds on
deposit in the Security Account that have accrued since the immediately
preceding Release Date; and
(ii) the amount on deposit in the Security Account,
(e) Special Release of Account Collateral. In the event that:
(i) any Aircraft is purchased by the Lessee of such Aircraft in
accordance with the Lease thereof or an Event of Loss occurs with respect
to such Aircraft; and
(ii) the Borrower in respect of such Aircraft prepays the Loan
relating to such Aircraft and any other amounts due and owing under the
Operative Documents in accordance with the terms of the Loan Agreement,
then, so long as no Lease Default or Loan Default has occurred and is continuing
at such time (and GFC has provided the Security Trustee with a certificate to
that effect from an Authorized Officer), the Security Trustee shall, immediately
following payment by such Borrower of the amounts specified in clause (ii)
above, direct the Trust Company to pay, and the Trust Company shall pay to GFC,
on behalf of such Borrower, an amount equal to the lesser of:
(A) the Security Amount for such Aircraft less any amounts attributable
thereto (not including any Investment Earnings thereon) which prior thereto have
been paid by the Trust Company pursuant to Section 8(G)(d) in respect of such
Aircraft; and (B) the amount on deposit in the Security Account.
(f) If at any time the amount on deposit in the Security Account falls
below the Required Amount (whether because of application of the Account
Collateral under Section 8G(b), investment losses, fees and expenses of the
Trust Company or otherwise), GFC shall immediately pay to the Security Account
such amount so that the amount on deposit in the Security Account is equal to
the Required Amount.
(g) Any amounts payable to GFC on behalf of any Borrower under Section
8G(d) or (e) shall be paid by GFC on behalf of the relevant Borrower or
Borrowers to the Lessees in such amounts as may be agreed from time to time
between GFC and the Lessees as partial refundment of the Initial Rent paid by
the relevant Lessee or Lessees.
SECTION 9. Representations. Warranties and Covenants of Initial Lessor
Party. Initial Lessor Parent, Walkers SPV. the Facility Agent the Initial Lender
and the Security Trustee.
33
(a) Each of the Initial Lessor Party (in relation to all representations
and warranties set out in this Section 9(a)) and the Initial Lessor Parent (in
relation to those representations and warranties set out in paragraphs (a)(i),
(a)(iii), (a)(iv), (a)(v), (a)(vi) and (a)(xviii) of this Section 9) represents
and warrants in relation to itself as of the Signing Date (and each
representation and warranty shall survive the Signing Date) that:
(i) It is a company duly incorporated and validly existing under
the law of its jurisdiction of incorporation. It has all requisite
corporate power and authority to own and operate its properties, to carry
on its business as now conducted and to enter into and perform its
obligations under each of the Operative Documents theretofore executed or
to be executed by it on such date.
(ii) Neither the execution and delivery by it of this Agreement and
each of the other Operative Documents theretofore executed or to be
executed by it on such date nor the performance by it of its obligations
hereunder or thereunder requires the consent or approval of, the giving of
notice to, or the registration or filing with, or the taking of any other
action, in respect of its jurisdiction of incorporation.
(iii) Neither the execution and delivery of this Agreement and each
of the other Operative Documents theretofore executed or to be executed by
it, the performance of its obligations hereunder or thereunder, nor its
consummation of the transactions contemplated hereby or thereby will
violate any Applicable Laws or will conflict with or result in any breach
of, or constitute a default under, or result in the creation or imposition
of any Lien (other than Permitted Liens) or any Lessor Lien upon any
Aircraft or any Lien upon any of its other property or assets, under any
Applicable Laws, its Constituent Documents or any indenture, mortgage,
deed of trust or other instrument or agreement to which it is a party or
by which it may be bound or to which any of its property or assets may be
subject.
(iv) The execution, delivery and performance of the Operative
Documents executed or to be executed by it on such date have been duly
authorized by all necessary corporate action. This Agreement and each of
the other Operative Documents theretofore executed or to be executed by it
on such date constitute, or upon execution will constitute, a direct,
general and unconditional obligation of it, legal, valid and binding upon
it and enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by the application of general principles
of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
(v) It is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of the Operative Documents to
which it is or will become a party on such date that any of them or any
other instrument be filed, recorded, registered or enrolled in any court,
public office or elsewhere in its jurisdiction of organization or that,
provided that none of the Operative Documents are executed in or brought
into the Cayman Islands, any stamp, registration or similar tax be paid in
its jurisdiction of
34
incorporation on or in relation to any of the Operative Documents to which
it is or will become a party on such date.
(vi) The execution and delivery by it of this Agreement and each of
the other Operative Documents theretofore executed or to be executed by it
on such date and the performance by it of its obligations hereunder and
thereunder do not require any approval or consent of any shareholder or
stockholder, as applicable, trustee or holder of any of its Indebtedness
or other obligations, other than as expressly contemplated by the
Operative Documents or as theretofore obtained and in full force and
effect.
(vii) There are no pending or, to its knowledge, threatened
investigations, suits or proceedings against it or affecting it or its
properties.
(viii)Since its incorporation, it has engaged in no business
activity, and will engage in no business activities, except in respect of
the transactions contemplated by the Operative Documents, and has incurred
no Indebtedness other than as contemplated by the Operative Documents.
(ix) Under the Applicable Laws on the Signing Date of its
jurisdiction of organization, or any political subdivision or taxing
authority thereof, there exists no tax, levy, deduction, charge or
withholding on or in connection with the execution or delivery of the
Operative Documents to which it is a party or any other document to be
furnished thereunder or on any payment to be made to the Lenders, the
Facility Agent, the Security Trustee or Ex-Im Bank under such Operative
Documents.
(x) All of the issued and outstanding share capital or capital
stock, as applicable, of Initial Lessor is held by the Initial Lessor
Parent free and clear of all Liens (other than the Lien of the Initial
Lessor Share Pledge Agreement, the Initial Declaration of Trust and Lender
Liens).
(xi) Initial Lessor has obtained the appropriate corporate
authority and is duly authorized under Applicable Law to hold Dollars to
service its Indebtedness under the Operative Documents.
(xii) It is located in the District of Columbia for the purposes of
Section 307 of Article 9 of the Uniform Commercial Code.
(xiii)The full and correct legal name, type of organization,
jurisdiction of organization, organizational ID number (if applicable) and
mailing address is correctly set forth in Schedule 6.
(xiv) Neither it nor any of its assets enjoys any right of immunity,
sovereign or otherwise, or exemption under Applicable Laws on any grounds
from suit, seizure, execution, attachment or other legal process in
respect of its obligations under this Agreement and each Operative
Document to which it is, or is to be, a party; and the execution, delivery
and performance of this Agreement and each Operative Document to which it
is or is to be a party constitute its private and commercial acts.
35
(b) Each Lessor further covenants and agrees for the benefit of the
other parties hereto that, until all of the Secured Obligations applicable to it
have been fully discharged, on and after the Signing Date it will:
(i) (A) not create, incur, assume or suffer to exist any Lien on
any of its assets or properties (other than Permitted Liens which are not
Lessor Liens) and (B) promptly take such actions as may be necessary to
duly discharge any such Liens or Lessor Liens at any time arising
(notwithstanding any corresponding obligation of any Lessee to discharge
any such Liens or Lessor Liens);
(ii) to the extent such Lessor may lawfully so agree and except to
the extent otherwise permitted by the Operative Documents, (A) preserve
and maintain its legal existence and all of its material rights,
privileges and franchises, (B) maintain its corporate existence under and
in compliance with all Applicable Laws, and (C) conduct its business in
all material respects in accordance with all Applicable Laws binding on it
and its operations or assets and perform its obligations under the
Operative Documents to which it is a party;
(iii) not enter into any business or other activity other than (A)
the business of purchasing and leasing each of the Aircraft pursuant to
the Leases to which it is a party and the exercise of rights under, and
the performance of all obligations to be performed by it pursuant to, the
Operative Documents or any documents executed or to be executed by it in
connection with the transactions contemplated by the Operative Documents
or the sale, lease or other disposition of the Aircraft after the
expiration or earlier termination of the leasing of any Aircraft under the
Leases to which it is a party pursuant to the terms of the Operative
Documents, (B) any other lawful business and activities expressly
consented to in writing by Ex-Im Bank and the Facility Agent and GFC, (C)
paying expenses incurred in the ordinary course of the business
contemplated by the Operative Documents, and (D) activities incidental to
the foregoing;
(iv) not, to the extent it may lawfully so agree, (A) commence any
case, proceeding or other action under any existing or future law of any
jurisdiction, within or outside its jurisdiction of incorporation,
relating to bankruptcy, insolvency, reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seek appointment of a
receiver, trustee, custodian or other similar official for it or for all
or any substantial part of its assets, or make a general assignment for
the benefit of its creditors; and not take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth above;
(v) not contract for, create, incur or assume any Indebtedness
(including contingent liability therefor), grant any credit, guarantee any
debts or grant any indemnity other than pursuant to the Operative
Documents or (subject to the receipt of any consents required by the
Operative Documents) as otherwise expressly permitted by the other
Operative Documents;
36
(vi) not enter into any contract or agreement with any Person, nor
create or incur, any liability to any Person, other than such contracts or
liabilities, or both, as provided for or permitted or contemplated by the
Operative Documents;
(vii) not, to the extent it may lawfully so agree, (A) except as
permitted under Section 9(d)(iv), consolidate with or merge into any other
Person or convey, transfer or lease all or any material part of its assets
to any Person, whether in a single transaction or a series of
transactions, except as expressly permitted by the Operative Documents;
and (B) issue any additional shares or capital stock, as applicable, or
alter any rights attached to its issued shares or capital stock, as
applicable, in existence at the date hereof except as required by any
Applicable Laws;
(viii)perform all of its obligations under the Operative Documents;
and
(ix) at the cost and expense of GFC (and GFC agrees to pay such
costs), do and perform such other and further acts and deliver such
further documents and assurances as may be reasonably requested by GFC,
the Facility Agent, the Security Trustee or Ex-Im Bank to establish,
maintain and protect the respective rights and remedies of any such party
and to carry out and effect the intent and purpose of the Operative
Documents to which it is a party.
(c) Each Lessor further covenants and agrees as follows:
(i) If it fails to perform or comply with any of its agreements
contained in the Operative Documents, then Ex-Im Bank, the Security
Trustee or the Facility Agent may (but shall not be required to) itself
perform or comply with such agreement;
(ii) It hereby waives, to the extent permitted by Applicable Laws,
its rights, if any, which it may now have or which at any time hereafter
may be conferred upon it, by statute or otherwise, to terminate, cancel,
revoke, alter, quit or surrender this Agreement, the Leases to which it is
a party or any other Operative Document;
(iii) In the event that it shall have received from any Lessee any
payment under a Lease to which it is a party (including, without
limitation, any payment of Rent or of insurance proceeds in connection
with an Event of Loss with respect to an Aircraft) it shall not be
entitled to retain such amount but shall be deemed to have received such
payment in trust and shall immediately upon receipt pay such amount to the
Facility Agent, Ex-Im Bank or the Security Trustee, as applicable, for
application in accordance with this Agreement and the other Operative
Documents;
(iv) It shall perform, on the reasonable request of the Facility
Agent, the Security Trustee or Ex-Im Bank, such further acts as may be
necessary to carry out the intent of this Agreement or any Operative
Document.
(v) It shall ensure that any and all Collateral which is hereafter
acquired by it shall, ipso facto, and without any further conveyance,
assignment or act on the part of it, Ex-Im Bank, the Facility Agent, the
Security Trustee or any Lender, become and be
37
subject to the Lien of the relevant Security Document, as fully and
completely as though specifically described therein;
(vi) it shall not sell, transfer, assign, lease or otherwise
dispose of (other than as expressly permitted by the Operative Documents)
its interest in any Aircraft, the Leases to which it is a party or any
other item of Collateral, or any portion thereof, other than in accordance
with the final payment in full of all Secured Obligations, or as otherwise
required by Section 8D. It shall not consent to or permit any amendment,
alteration, waiver, novation or substitution of any of the Operative
Documents, or consent to any alteration, waiver, novation or substitution
with respect to any of the Collateral, or give any approval or consent or
permission or make any determination or election provided for in any Lease
to which it is a party reserved to it without the prior written consent of
the Security Trustee (acting on the instruction of the Instructing Group,
which the Instructing Group may withhold in its sole discretion). It shall
not give any approval or consent or permission or make any determination
or election (except for those provisions expressed to be at the direction
of the relevant Lessee) under any Operative Document without the prior
written consent of the Security Trustee (acting on the instruction of the
Instructing Group, which may be withheld in its own discretion); and
(vii) It will not enter into or consent to any amendment,
modification or waiver of any Operative Document to which it is a party
without, so long as no Guarantee Default or Lease Event of Default shall
have occurred and be continuing, the prior consent of GFC, unless such
amendment, modification or waiver does not have an adverse effect on the
Lessee or the Guarantors (or any thereof).
(d) Each Lessor Parent covenants and agrees with the other parties
hereto that until all of its obligations under the Operative Documents have been
fully performed, in relation to each Borrower and/or Lessor with respect to
which it is Lessor Parent, it will:
(i) take all action within its power to cause each such Borrower
or Lessor to comply with its covenants, agreements and undertakings set
forth herein and in the other Operative Documents to which each such
Person is or will become a party (other than payment obligations under the
Loan Agreement, the Security Documents and any other Operative Document);
(ii) take, or cause to be taken, at GFC's sole cost and expense,
such action with respect to each Lessor Share Pledge Agreements to which
it as a party is or may be necessary (in the reasonable opinion of Ex-Im
Bank or the Security Trustee), or that the Security Trustee or Ex-Im Bank
may from time to time request to establish, protect, preserve and/or
perfect the Lien created by such Lessor Share Pledge Agreements and will
furnish to the Facility Agent, the Security Trustee and Ex-Im Bank prompt
notice of the necessity of any such action, together with such
instruments, in execution form, and such other information as may be
required to enable the Facility Agent, the Security Trustee or Ex-Im Bank
to take such action;
(iii) not (only in its capacity as trustee of any Lessor Parent
Trust pursuant to the relevant Declaration of Trust) enter into any
business or other activity other than the
38
business of owning or holding the shares of each such Borrowers and/or
Lessors and the carrying out of the transactions contemplated hereby or by
the other Operative Documents; and
(iv) in the event of any change in Applicable Laws by any such
Borrower's and/or Lessor's jurisdiction of incorporation after the date of
this Agreement that materially restricts such Person's ability to perform
any of its material obligations hereunder or under the other Operative
Documents to which it is or will become a party or results in such Lessor
incurring any material cost, liability or expense which it would otherwise
not have incurred in the absence of such change in Applicable Laws, it
shall (upon the request of GFC, Ex-Im Bank or the Facility Agent), at the
cost of GFC, use its reasonable efforts to (A) authorize such Person to
apply to be continued in a country or jurisdiction outside such Person's
jurisdiction of organization and to be discontinued under the laws of such
Person's jurisdiction of organization or organize a successor (in the case
of the Initial Lessor Parent, in the Cayman Islands) of such Person that
shall be able to perform all of the obligations of such Person under the
Operative Documents to which it is or will become a party, (B) except in
the case of the Initial Lessor Parent, demonstrate to the reasonable
satisfaction of GFC. Ex-Im Bank and the Facility Agent that the
continuation or a merger or consolidation of such Person with the
successor or a transfer of all the property of such Person to the
successor will cause GFC, Ex-Im Bank, the Facility Agent and the Lenders
to be in a position at least equal, in all material respects, to that in
which they were immediately preceding the effective date of such
restriction and (C) cause such Person either to continue into such other
jurisdiction or to merge or consolidate with such successor or to transfer
all of its assets to such successor. Each Lessor Parent shall give GFC,
Ex-lm Bank and the Facility Agent prior written notice of any proposed
continuation, merger, consolidation or transfer under this clause (iv),
together with proposed forms of documents for such continuation or for
organization of the successor and the merger, consolidation or transfer.
Each such Borrower and/or Lessor shall deliver to GFC, Ex-Im Bank and the
Facility Agent such certificates, opinions and other documents as any of
them may reasonably request in connection with such continuation, merger,
consolidation or transfer. No party hereto shall unreasonably withhold or
delay any consent or approval in connection with such merger,
consolidation or transfer.
(v) not (without the prior written consent of the Security
Trustee), to the extent it may lawfully so agree, amend or modify any
provision of a Lessor's or Borrower' Constituent Documents;
(e) Each Lessor Parent Trust Company, in its individual capacity,
represents, warrants and covenants as of, in the case of Walkers SPV, the
Signing Date (which representations and warranties shall survive such Signing
Date) that:
(i) it is a trust company duly organized and validly existing
under the laws of its jurisdiction of incorporation and has the requisite
power and authority to enter into the Operative Documents to which it is
or will become a party and to carry out the transactions contemplated
thereby;
39
(ii) the Lessor Parent Trust under each Declaration of Trust to
which it is a party is legally valid, binding and effective;
(iii) there are no pending, or to its knowledge, threatened
investigations, suits or proceedings against, or affecting the trust
properties comprised within each Declaration of Trust to which it is a
party;
(iv) it has not permitted the Initial Borrower Party to enter into
any agreement, indenture, mortgage, pledge or other transaction except as
provided in the Operative Documents;
(v) Initial Borrower Party has not engaged in any business other
than as contemplated by the Operative Documents;
(vi) the execution, delivery and performance by each of it and the
Initial Lessor Parent of the Operative Documents to which it is or will
become a party are not in violation of its Constituent Documents or any
indenture, mortgage, deed of trust or other instrument or agreement to
which it is a party or by which it is bound or to which any of its
property or assets may be subject (including each Declaration of Trust to
which it is a party) or of any the Applicable Law of its jurisdiction of
incorporation or governmental rule or regulation governing its trust
powers in effect at the time of execution and delivery of such Operative
Documents, and binding on it;
(vii) neither the execution and delivery by either of it or the
Initial Lessor Parent of any of the Operative Documents to which it is or
will become a party nor the consummation by it of any of the transactions
contemplated thereby require the consent or approval of, the giving of
notice to, or the registration or filing with, or the taking of any other
action in respect of, any agency or authority in its jurisdiction of
incorporation;
(viii)to the best of its knowledge, no Lessor Lien attributable to
it or to the Initial Lessor Parent exists;
(ix) the performance by the Initial Lessor Parent of its
obligations under the Operative Documents to which it is or will become a
party will not subject any Aircraft or any portion thereof to any Lien
under any indenture, mortgage, deed of trust or other instrument to which
it is a party or by which it is bound (other than as expressly permitted
by the Operative Documents); and
(x) it will perform its obligations under each Declaration of
Trust and each Lessor Share Pledge Agreement to which it is a party.
(f) The Security Trustee represents and warrants to each party hereto as
of each Borrowing Date (which representations and warranties are made in its
individual capacity and shall survive such Borrowing Date) that:
(i) it is a national banking association duly organized, validly
existing and in good standing under the laws of the United States and has
the requisite power and
40
authority to enter into the Operative Documents to which it is or will
become a party and to carry out the transactions contemplated thereby;
(ii) it has duly authorized, executed and delivered the Operative
Documents to which it is or will become a party and each of such Operative
Documents constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, receivership,
reorganization, moratorium or other similar laws affecting creditors'
rights generally, and to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law);
(iii) the execution, delivery and performance by it of the Operative
Documents to which it is or will become a party have been duly authorized
by all necessary action on its part, do not require any approval of its
stockholders or consent of any trustee or holder of its indebtedness or
other obligations and are not in violation of its charter, by-laws or
similar instrument or any indenture, mortgage, deed of trust or other
instrument or agreement to which it is a party or by which it is bound or
to which any of its property or assets may be subject or of any
constitutional provision, law, ordinance, decree or regulation of the
United States or the State of Utah, or any agency, department or
instrumentality of either thereof governing its banking and trust powers
in effect at the time of execution and delivery of such Operative
Documents, and binding on it and will not result in a Lien upon any of the
Collateral except as contemplated by the Operative Documents
(g) The Security Trustee covenants and agrees not to consent to or
permit any amendment, alteration, waiver, novation or substitution of any of the
Operative Documents, or consent to any alteration, waiver, novation or
substitution with respect to any of the Collateral, or give any approval or
consent or permission or make any determination or election provided for in any
Operative Document, except as expressly permitted by the Operative Documents.
(h) The Initial Lender represents and warrants to each other party
hereto that such party is purchasing the Interest to be acquired by it for its
account for investment and with no present intention of distributing or
reselling such Interest or any part thereof in violation of the Securities Act
of 1933, but without prejudice, however, to its right at all times to sell or
otherwise dispose of all or any part of such Interest in compliance with the
applicable securities laws of any applicable jurisdiction and the terms of the
Operative Documents. The Initial Lender further represents and warrants to each
Lessee and Ex-Im Bank that no part of the funds to be used by it to purchase or
fund, as the case may be, its Interest in connection with the transactions
contemplated hereby constitutes plan assets of an employee benefit plan in
relation to itself or its Affiliates (other than, for the avoidance of doubt,
solely by virtue of holding any commercial paper issued by the Primary Lender)
which is subject to the United States Employee Retirement Income Security Act of
1974, as amended ("ERISA") and/or subject to Section 4975 of the United States
Internal Revenue Code of 1986, as amended. The Initial Lender further covenants
that (notwithstanding anything herein or in any other Operative Document to the
contrary) it will not transfer its Interest to any transferee thereof, unless
such transferee makes the representation and warranty contained in the previous
sentences of this Section 9(i) and the covenant contained in this sentence and
agrees to be bound by all of the other provisions hereof and of all the other
41
Operative Documents applicable to the Lenders. As used in this Section, the term
"plan asset" shall have the meaning assigned to such term under ER1SA and the
regulations promulgated thereunder.
(i) Each of the Facility Agent and the Initial Lender represents and
warrants to each of the parties hereto as of the date hereof and as of each
Borrowing Date (which representations and warranties shall survive such
Borrowing Date), and covenants and agrees for the benefit of each other party
hereto that:
(i) it is a public limited liability company duly organized and
validly existing under the laws of its jurisdiction of incorporation and
has the required power and authority to enter into the Operative Documents
to which it is or will become a party and to carry out the transactions
contemplated thereby;
(ii) it has duly authorized, executed and delivered the Operative
Documents to which it is or will become a party and each of such Operative
Documents constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, receivership,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law);
(iii) the execution, delivery and performance by it of the Operative
Documents to which it is or will become a party have been duly authorized
by all necessary action on its part, do not require any approval of its
stockholders or consent of any trustee or holder of its indebtedness or
other obligations and are not in violation of its charter, by-laws or
similar instrument or any indenture, mortgage, deed of trust or other
instrument or agreement to which it is a party or by which it is bound or
to which any of its property or assets may be subject and will not result
in a Lien upon any of the Collateral except as contemplated by the
Operative Documents; and
(iv) the Facility Agent shall notify GFC of the amount of each
installment of Basic Rent (including any applicable Additional Rental
Amount) at least ten (10) days prior to each Basic Rent Payment Date;
provided that the Facility Agent's failure to so notify GFC shall not
relieve the relevant Lessee of its obligation to pay such amount of Basic
Rent.
(j) Notwithstanding anything contained herein to the contrary, each of
the parties hereto (other than any Lessee) agrees and covenants in relation to
each Aircraft and as to itself that, unless, in each case, a Lease Event of
Default shall have occurred and be continuing, it will not take, and it will not
permit any Person claiming through or under it to take, any action inconsistent
with the relevant Lessee's rights under the Lease for such Aircraft or any other
Operative Document to which such Lessee is a party, or otherwise through its own
actions or failure to observe its obligations hereunder or under any other
Operative Document in any way interfere with or interrupt the quiet enjoyment of
the use, operation and possession of such Aircraft, the related Airframe or any
related Engine, by such Lessee, the relevant Sublessee, if any, or any Operating
Lessee thereof.
42
(k) EXCEPT FOR THE FOREGOING REPRESENTATIONS AND WARRANTIES IN THIS
PARTICIPATION AGREEMENT AND ANY OTHER REPRESENTATIONS EXPRESSLY MADE BY ANY
PARTY HERETO IN ANY OTHER OPERATIVE DOCUMENT, NONE OF EACH LESSOR, EACH LESSOR
PARENT TRUST COMPANY, EACH LESSOR PARENT, EACH LESSEE (IN ITS CAPACITY AS A
LESSOR), EACH LENDER, THE FACILITY AGENT, EX-IM BANK OR THE SECURITY TRUSTEE
MAKES OR SHALL BE DEEMED TO HAVE MADE OR TO MAKE ANY WARRANTIES, REPRESENTATIONS
OR GUARANTEE OF ANY KIND, INCLUDING BUT NOT LIMITED TO (I) THE AIRWORTHINESS,
VALUE, CONDITION, DESIGN, COMPLIANCE WITH SPECIFICATIONS, OPERATION OF, OR THE
QUALITY OF THE MATERIAL OR WORKMANSHIP IN, OR TITLE TO, OR ANY DEFECT IN, ANY
AIRCRAFT, ANY AIRFRAME, ANY ENGINE, ANY PART, ANY DATA OR ANY OTHER THING
DELIVERED, LEASED, SOLD OR TRANSFERRED UNDER THE OPERATIVE DOCUMENTS, (II) ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR
PURPOSE. AGAINST INFRINGEMENT OR THE LIKE, OR ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (III) ANY OBLIGATION,
LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT WITH RESPECT TO ANY AIRCRAFT, ANY
AIRFRAME, ANY ENGINE, ANY PART, ANY DATA OR ANY OTHER THING DELIVERED, LEASED,
SOLD OR TRANSFERRED UNDER THE OPERATIVE DOCUMENTS, WHETHER OR NOT IN STRICT OR
ABSOLUTE LIABILITY OR ARISING FROM THE NEGLIGENCE OF ANY LESSOR, LESSOR PARENT,
LENDER, LESSEE (IN ITS CAPACITY AS A LESSOR), THE FACILITY AGENT, THE SECURITY
TRUSTEE OR EX-IM BANK, ACTUAL OR IMPUTED OR (IV) ANY OBLIGATION, LIABILITY,
RIGHT, CLAIM OR REMEDY FOR LOSS OF, OR DAMAGE TO, ANY AIRCRAFT, ANY AIRFRAME,
ANY ENGINE, ANY PART, ANY DATA OR ANY OTHER THING, FOR ANY LOSS OF USE, REVENUE
OR PROFIT, OR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES. NONE OF
EX-IM BANK, THE FACILITY AGENT, ANY LESSOR PARENT, ANY LENDER OR THE SECURITY
TRUSTEE SHALL BE LIABLE OR OTHERWISE RESPONSIBLE IN ANY MANNER FOR ANY
REPRESENTATION OR WARRANTY MADE BY ANY LESSOR, LESSEE (IN ITS CAPACITY AS A
LESSOR) OR GFC, OR ANY OPERATING LESSEE (EXCEPT AS EXPRESSLY PROVIDED IN THE
OPERATIVE DOCUMENTS).
SECTION 10. Indemnities and Taxes.
(a) Claims Defined. "CLAIMS" shall mean any and all harm, liabilities
(including any liability in tort), losses, damages, obligations, expenses,
disbursements, penalties, costs, fees, actions, suits or Taxes of whatsoever
kind and nature (and including reasonable legal fees and expenses) that may be
imposed on, incurred by, suffered by, or asserted against an Indemnified Person,
any Aircraft, any Airframe, any Engine or any part thereof or any interest
therein and, except as otherwise expressly provided in this Section 10, shall
include amounts (other than principal of and interest on the Loans) payable by
any Lessor pursuant to the Loan Documents. A "NON-TAX CLAIM" shall mean any
Claim other than a Claim for Taxes.
(b) Indemnified Person Defined and Non-applicability. "INDEMNIFIED
PERSON" means the Trust Estate, Ex-Im Bank, each Lessor, each Lessor Parent,
each Lessor Parent Trust
43
Company or the Security Trustee, and their respective successors, permitted
assigns, transferees, Affiliates, directors, officers, employees, shareholders
(including corporate shareholders), servants, attorneys-in-fact and agents. In
respect of any Indemnified Person, any of its Affiliates, directors, officers,
employees, shareholders (including corporate shareholders), servants,
attorneys-in-fact and agents is referred to herein as such Indemnified Person's
"RELATED INDEMNITEES".
(c) Claims Indemnified. Subject to the exclusions stated in subsection
(d) below, each Lessee agrees on demand therefor (subject to subsection (k)
below) to jointly and severally indemnify, defend and hold harmless (and to pay
additional fees, interest, rent or other amounts to indemnify, defend and hold
harmless) each Indemnified Person on an After-Tax Basis against Claims
(including Claims for Taxes and Non-Tax Claims based on negligence, warranty,
absolute, strict or product liability and any other theory of liability) imposed
on, incurred by or asserted against any Indemnified Person, any Aircraft, any
Airframe, any Engine or any Part (including, with respect to a Claim for Taxes,
any part of any Aircraft, Airframe or any Engine) in any way relating to, based
on, measured by or arising out of (1) any Operative Document or any properties
of any Lessor (including any Aircraft or any Engine) or any action or inaction
of it, any Operating Lessee, any Guarantors, any Lessor, any Sublessee, the
Manufacturer, the Engine Manufacturer or any other supplier or seller in
connection herewith or therewith or any user or person in possession of any
Aircraft, any Airframe, any Engine or Part, or in any way relating to or arising
out of: the manufacture of any Aircraft, any Airframe, or any Engine or any Part
thereof, the purchase, acceptance or rejection of any Aircraft, any Airframe,
any Engine, the ownership, delivery, nondelivery, lease, re-lease, sublease,
possession, use, presence, assembly, installation, repossession, abandonment,
replacement, storage, importation, exportation, registration, deregistration,
modification, transfer of title, operation, repair, testing, maintenance,
condition, sale, return or other disposition of any Aircraft, any Airframe, any
Engine or any Part thereof (including all costs incurred in making it ready for
sale or other disposition and including without limitation latent and other
defects, whether or not discoverable by any Lessor, Operating Lessee or Lessee,
and any claim for patent, trademark or copyright infringement) or the creation,
existence or otherwise with respect to the Collateral and the Trust Estate, (2)
the rentals, receipts, income, earnings or gains arising from any Aircraft, any
Airframe, any Engine or any Part thereof (including, but not limited to, rentals
or other amounts payable under any Lease, Operating Lease, the Loan Documents
and the other Operative Documents), (3) any payment made pursuant to any
Operative Document (including, without limitation, amounts payable under the
Loan Agreement or on or with respect to the Loans or the Purchase Agreement
(whether on or prior to any Borrowing Date)), (4) the execution, delivery,
registration, recording, performance, or enforcement of any Operative Document
or any other document executed and delivered by it, any Operating Lessee, any
Lessor, the Guarantors, any Lessor Parent or any Lessee Parent in connection
with or relating to the Operative Documents (including, without limitation, in
connection with the occurrence and continuance of any Lease Default, Loan
Default, Lease Event of Default or Loan Event of Default or with the recovery of
possession of any Aircraft while any Lease Event of Default or Operating Lease
Event of Default is continuing or the carrying out of any work or inspections
required for seeing that the condition of any Aircraft complies with that
specified in the related Lease or Operating Lease), (5) circumstances otherwise
with respect to or in connection with the transactions contemplated by the
Operative Documents (including in preventing or attempting to prevent the
arrest, confiscation, seizure, taking in execution or impounding or detention of
any Aircraft) or (6) any
44
Designation or Substitution Each Lessee shall be obligated under this Section 10
whether or not any Indemnified Person is indemnified or insured against any
Claim by any other Person under any other document. Notwithstanding anything to
the contrary herein contained, any Indemnified Person may proceed directly and
in its own name against any Lessee or any Guarantor with respect to the
indemnities set forth in the first sentence of this Section 10(c), without first
resorting to any other rights of indemnification.
(d) Claims Excluded. With respect to any Indemnified Person, the
following are excluded from each Lessee's agreement to indemnify under this
Section 10:
(i) any Claim (including any Claim for Taxes) incurred by, or
imposed on, the Indemnified Person (other than Ex-Im Bank or a Related
Indemnitee of Ex-Im Bank at any time which Ex-Im Bank is a Lender) to the
extent it would not have been imposed if such Indemnified Person or a
Related Indemnitee (other than a Related Indemnitee of Ex-Im Bank) had not
engaged in transactions unrelated to those contemplated by this Agreement
or any other Operative Document;
(ii) with respect to any particular Indemnified Person, any Claim
to the extent caused by the gross negligence, willful misconduct or fraud
of such Indemnified Person or a Related Indemnitee (other than a Related
Indemnitee of Ex-Im Bank) (other than as may be imputed to such
Indemnified Person as a result of its participation in the transactions
contemplated by the Operative Documents);
(iii) with respect to any particular Indemnified Person (other than
Ex-Im Bank), any Claim to the extent arising as a result of the breach or
non-compliance with any of the terms of, or any misrepresentation
contained in, this Agreement or any other Operative Document or any
agreement relating hereto or thereto by which such Indemnified Person or a
Related Indemnitee is expressly bound, by such Indemnified Person or a
Related Indemnitee (including the imposition against such Indemnified
Person or a Related Indemnitee of any Lessor Lien or Lender Lien);
(iv) with respect to any particular Indemnified Person, any Claim
that would not have been imposed in the absence of an amendment of or
supplement to any Operative Document (other than an amendment or
supplement made while a Lease Event of Default or a Loan Event of Default
is continuing) by such Indemnified Person or a Related Indemnitee (other
than a Related Indemnitee of Ex-Im Bank) made in violation of the terms
hereof or thereof;
(v) with respect to each Lessee (but without limiting such Claim
with respect to any Other Lessee), any Claim to the extent attributable to
acts, omissions or events occurring with respect to the period after full
and final compliance by such Lessee with all of the terms of the Leases to
which it is a party and performance by such Lessee of all of its
obligations hereunder and under each such Lease;
(vi) any Claim for Taxes imposed on an Indemnified Person (other
than Ex-Im Bank or a Related Indemnitee of Ex-Im Bank at any time when
Ex-Im Bank is a Lender) relating to any Aircraft or the related Airframe
or any related Engine or Part to the extent
45
attributable to acts, omissions or events (other than those of or
attributable to any Lessee, any Operating Lessee, the Guarantors or their
agents) that occur after possession of such Aircraft, Airframe, Engine or
part, as the case may be, has been delivered to the relevant Lessor
pursuant to the Lease for such Aircraft (other than following a Lease
Event of Default or a Loan Event of Default) and each relevant Lessee has
performed all of its obligations thereunder; provided, however, that in
the case of Ex-Im Bank, this clause shall not apply to acts, omissions or
events occurring or arising before the principal of, and interest on, and
all other amounts due with respect to the Loans or otherwise payable under
the Operative Documents are paid in full;
(vii) any Claim for Taxes incurred by, or imposed on, an Indemnified
Person (other than Ex-Im Bank and any holder of a Note subsequent to Ex-Im
Bank) to the extent it results from any sale, assignment (except for any
assignment under and in compliance with the Security Documents), transfer,
participation or other disposition (whether voluntary or involuntary) by
such Indemnified Person or a Related Indemnitee of any interest of any
such Person in any of the Loans, any Aircraft, any Airframe, any Engine,
any Part, any Lessor or any other Indemnified Person or in the Operative
Documents other than any sale, assignment, transfer, participation or
disposition (A) in connection with an exercise of remedies during the
continuance of a Lease Event of Default or Loan Event of Default; (B) at
any time following the termination of any Lease or acceleration of the
Loans pursuant to the Loan Agreement relating to such Aircraft or Loan;
(C) in connection with the termination of the Lease for such Aircraft at
the discretion of the relevant Lessee; (D) in connection with the exercise
by any such Indemnified Person of its rights or remedies under any
Operative Document; (E) that occurs upon the request of any Lessee or any
Operating Lessee or (F) that occurs pursuant to Sections 7, 8 or 9 of the
Lease for such Aircraft; provided, however, that this clause (vii) shall
only apply to a sale, assignment, transfer, participation or other
disposition of the Loans, or any part thereof, to the extent that the Tax
for which an indemnity is being claimed existed as of the date hereof;
(viii)any Claim for Taxes imposed against or payable by an
Indemnified Person by any jurisdiction or taxing authority thereof as a
result of a failure by such Indemnified Person or a Related Indemnitee
(other than a Related Indemnitee of Ex-Im Bank) to comply with any
certification or other procedure as required by the law of the
jurisdiction imposing the Tax as a precondition to any exemption from, or
reduction of, such Tax to which such Indemnified Person would be entitled,
so long as (A) the Indemnified Person would have been able to comply with
such requirement, (B) such procedure or compliance therewith would not
expose such Indemnified Person to any cost or risk of materially adverse
consequences, and (C) any Lessee provides to the Indemnified Person
written notice of the relevant Tax and of the relevant certification or
procedure in sufficient time and assistance to allow the Indemnified
Person to timely comply with such certification or procedure;
(ix) with respect to any particular Indemnified Person (other than
Ex-Im Bank or a Related Indemnitee of Ex-Im Bank at any time which Ex-Im
Bank is a Lender), any Claim for Taxes (not including sales, use, rental,
ad valorem, license, property, stamp, or value added Taxes) imposed on the
overall net income, net profits, net receipts or net
46
gains of any Indemnified Person by the jurisdiction in which it is
incorporated or maintains its principal place of business or in any
jurisdiction in which it conducts business from time to time (other than a
jurisdiction in which it is deemed to conduct business as a result of the
transactions contemplated by the Operative Documents or a jurisdiction in
which it would not be subject to a Tax of such type but for the location,
registration or use of any Aircraft in such jurisdiction or the activities
of any Operating Lessee, Lessor or Lessor Parent in such jurisdiction);
(x) except in the case of an Indemnified Person that was an
Indemnified Person on the Delivery Date in respect of the relevant
Aircraft (an "ORIGINAL INDEMNIFIED PERSON"), any Claim for Taxes imposed
on an Indemnified Person (other than the Facility Agent, the Security
Agent or any successors thereto in such capacity or Ex-Im Bank or any
holder of a Note subsequent to Ex-Im Bank) to the extent that such Taxes
exceed the Taxes that would have been imposed on the Original Indemnified
Person through or from whom it (directly or indirectly) obtained its
Interest (except in respect of an Indemnified Person that acquired its
Interest pursuant to a transfer occurring at the request of any Lessee or
during the occurrence of a Lease Event of Default or Loan Event of Default
pursuant to the exercise of remedies); provided, however, that this clause
(x) shall only apply to Taxes imposed under applicable law as in effect on
the date of this Agreement;
(xi) any Claims for Taxes imposed against or payable by an
Indemnified Person (other than Ex-Im Bank or any holder of a Note
subsequent to Ex-Im Bank) to the extent such Taxes would not have been
imposed but for the situs of organization, any place of business or the
activities of any Indemnified Person in the jurisdiction imposing the Tax
(unless such place of business or activity are solely the result of the
operation, presence or registration of any Aircraft or any Engine or other
presence of any Lessee or any Operating Lessee therein or the exercise by
such Indemnified Person of any of its rights or remedies under any
Operative Document or the receipt of any payment under any Operative
Document);
(xii) any Claim for interest, penalties or additions to Tax imposed
against or payable by an Indemnified Person that result from the failure
of such Indemnified Person to file any return properly and timely unless
such failure is caused by the failure of any Lessee or any Operating
Lessee to provide to such Indemnified Person any information reasonably
requested by such Indemnified Person that is available to any Lessee or
any Operating Lessee and required to file properly and timely such return
or the failure of any Lessee or any Operating Lessee to perform its
obligations under Section 10(j), (n) or (q) hereof;
(xiii)any Claim for Taxes that are being contested in accordance
with the provisions of Section 10(i) during the pendency of such contest,
except to the extent required to be paid or advanced by any Lessee
pursuant to Section 10(i) hereof;
(xiv) any Claim for Taxes imposed against or payable by an
Indemnified Person attributable to the failure of such Indemnified Person
to take timely action in contesting
47
such Claim if required to take such action pursuant to Section 10(i), but
only if such failure precludes or prejudices a contest of the relevant
Taxes;
(xv) any Claim for Taxes included in Transaction Costs (but only to
the extent such Transaction Costs are reimbursed under Section 12 on an
After-Tax Basis); or
(xvi) in the case of any particular Indemnified Person, attributable
to a Lien, to the extent that such Lien was created by such Indemnified
Person, constituting (x) a Lender Lien or (y) in the case of Xxxxx Fargo,
a Lien on any Aircraft or other Collateral which results from Claims
against Xxxxx Fargo in its individual capacity not related to the
transactions contemplated by the Operative Documents.
(e) Insured Claims. In the case of any Claim indemnified by a Lessee
hereunder that is covered by a policy of insurance maintained pursuant to
Section 10 of a Lease to which such Lessee is a party, each Indemnified Person
agrees at such Lessee's expense to cooperate with the insurers in the exercise
of their rights to investigate, defend or compromise such Claim as may
reasonably be required to retain the benefits of such insurance with respect to
such Claim, so long as no such cooperation shall entail (A) a risk of any
criminal liability, (B) a material risk of unindemnified civil liability or (C)
a material risk of the sale, loss, forfeiture or seizure of any of the
Collateral.
(f) Procedure for Non-Tax Claims. An Indemnified Person shall give
prompt notice of the existence of any circumstance that, in its reasonable
opinion, is likely to give rise to a Non-Tax Claim and shall promptly (and in no
event later than thirty (30) days after it becomes aware of such a Claim) notify
any Lessee of any Non-Tax Claim as to which indemnification is sought (provided
that failure to give such notice shall not affect such Lessees' indemnity
obligations hereunder except to the extent any such Lessee is precluded or
prejudiced thereby). An Indemnified Person (other than Ex-Im Bank) asserting any
Non-Tax Claim arising under any Operative Document shall, at no cost to itself,
exercise all rights reasonably available to it under the terms thereof to
mitigate such Non-Tax Claim, and shall advise any Lessee, at any Lessee's
request, of the status of such action. The following provisions of this Section
10(f) shall not apply to Non-Tax Claims in respect of amounts payable by any
Lessor under any Operative Document other than pursuant to this Section 10.
Subject to the rights of insurers under policies of insurance maintained
pursuant to Section 10 of any Lease, each Lessee shall have the right to
investigate, and the right in its sole discretion to defend or compromise in
good faith in a commercially reasonable manner and with counsel reasonably
satisfactory to the relevant Indemnified Person, any Non-Tax Claim for which
indemnification from it is sought under this Section 10, and such Indemnified
Person shall cooperate with all reasonable requests of such Lessee in connection
therewith: provided, that to the extent that other claims related or unrelated
to the transactions contemplated hereby are part of the same proceeding
involving such Non-Tax Claim, such Lessee may assume responsibility for the
control of such Non-Tax Claim (except for any Non-Tax Claim against Ex-Im Bank
involving a Claim for criminal liability, any violation of law or (unless such
Lessee assures to Ex-Im Bank's satisfaction payment thereof or for which an
adequate bond has been posted in respect thereof) any material civil
liabilities) to the extent that the same may be and is severed from such other
claims (and each Indemnified Person (other than Ex-Im Bank in the circumstances
described in the last sentence of this Section 10(f)) shall use its reasonable
efforts to obtain such severance) and, if not severable, such Lessee may assume
joint
48
control thereof with such Indemnified Person; provided, further, that no such
Non-Tax Claim shall be compromised on a basis that admits any criminal
violation, negligence, willful misconduct or other liability on the part of such
Indemnified Person without such Indemnified Person's express consent (except
that such Lessee may not so compromise a Non-Tax Claim against Ex-Im Bank that
admits (in addition to the foregoing) any violation of law or (unless Lessee at
the time of such compromise pays or assures (to Ex-Im Bank's satisfaction)
payment of such claim in full) any material civil penalties). Where any Lessee
or the insurers under a policy of insurance maintained by such Lessee undertake
(whether solely or jointly with an Indemnified Person) the control of a severed
Non-Tax Claim (with counsel reasonably satisfactory to such Indemnified Person
and without reservation of rights against such Indemnified Person) pursuant to
this Section 10(f), no additional legal fees or expenses of such Indemnified
Person in connection with the defense of such Non-Tax Claim shall be indemnified
hereunder unless such fees or expenses were incurred at the request of such
Lessee or such insurers or where any conflict of interest may exist between such
Lessee or its insurers and such Indemnified Person. Subject to the requirements
of any policy of insurance, an Indemnified Person may participate at its own
expense in any judicial proceeding controlled by such Lessee pursuant to the
preceding provisions and such participation shall not constitute a waiver of the
indemnification provided in this Section 10. Nothing contained in this Section
10(f) shall be deemed to require an Indemnified Person to contest any Non-Tax
Claim or to assume responsibility for or control of any judicial proceeding with
respect thereto. Notwithstanding the foregoing, upon Ex-Im Bank's written notice
to such Lessee and the Facility Agent that Ex-lm Bank cannot permit such Lessee
to assume the defense or joint control of the defense of any Claim as a matter
of Applicable Law or stated policy of Ex-Im Bank, Ex-Im Bank shall assume the
defense of such Claim, at the sole cost and expense of such Lessee.
(g) Subrogation. To the extent that a Non-Tax Claim indemnified by any
Lessee under this Section 10 is in fact paid in full by such Lessee or any
insurer under a policy of insurance maintained by such Lessee pursuant to
Section 10 of the Lease, or both, such Lessee or such insurer, or both, as the
case may be, shall, to the extent permitted by Applicable Laws or, in the case
of Ex-Im Bank, its stated policy, be subrogated to the rights and remedies of
the Indemnified Person (other than under insurance policies independently
maintained and available to such Indemnified Person) on whose behalf such
Non-Tax Claim was paid with respect to the transaction or event giving rise to
such Non-Tax Claim. Should an Indemnified Person receive any cash refund, in
whole or in part, with respect to any Non-Tax Claim fully paid by such Lessee
hereunder, it shall, so long as no Material Default or Event of Default shall
have occurred and be continuing, promptly pay, subject to deduction of any Taxes
levied, imposed, asserted or required to be deducted from such amount, the
amount refunded (but not an amount in excess of the amount paid (plus the
amount, if any, of any interest received by the Indemnified Person with such
refund) to such Indemnified Person in respect of such Non-Tax Claim) over to the
applicable Lessee. Notwithstanding the foregoing provisions of this Section
10(g), no such subrogation shall be permitted if it interferes with such
Indemnified Person's ability to enjoy its rights under the Operative Documents.
(h) Calculation of Indemnity Payments in Respect of Claims. Any payment
which Lessee shall be required to make to or for the account of any Indemnified
Person with respect to any Claim which is subject to indemnification under this
Section 10 shall be made on a net After-Tax Basis, taking into account all Taxes
(without regard to the exclusions set forth in
49
Section 10(d)), (other than clauses (ii), (iii), (iv) and (viii) thereof)
required to be paid by the Indemnified Person as a result of such payment,
provided that such Indemnified Person shall provide such certificates or
information reasonably requested by Lessee to minimize the amount of any such
Claim which such Indemnified Person is qualified to submit.
(i) Contest of Claim for Tax. If a Claim shall be made for any Tax
(including Withholding Taxes) for which any Lessee is obligated pursuant to this
Section 10, such Lessee shall be entitled to contest the imposition of such Tax
and withhold payment during pendency of such contest, but only if such contest
(1) is made in good faith by appropriate proceedings that do not involve any
substantial risk of the sale, seizure, forfeiture or loss of any Collateral or
title thereto, interest therein or use thereof, and in the case of such
proceedings so long as adequate reserves are maintained in respect of such Taxes
in accordance with generally accepted accounting principles, (2) is permitted by
Applicable Laws (it being also understood that such Lessee shall in no event be
allowed to withhold payment of any Withholding Tax), (3) does not involve any
risk of criminal or a material risk of unindemnified civil penalties against the
relevant Indemnified Person and (4) does not involve, in the reasonable
commercial discretion of the relevant Indemnified Person, any prejudice to the
business, operations or commercial financial standing of such Indemnified Person
or any Related Indemnitee. Unless otherwise required by law or unless the
contest shall involve a claim for Taxes not indemnified against by any Lessee,
any such contest shall be conducted by and in the name of any Lessee (unless
Ex-Im Bank is the Indemnified Person): provided that such Lessee shall have
acknowledged and agreed in writing, in form and substance satisfactory to such
Indemnified Person, such Lessee's liability for such Taxes (if and to the extent
such Lessee does not prevail in such contest). If a written Claim shall be made
against and received by any Indemnified Person for any Tax for which any Lessee
is obligated to indemnify pursuant to this Section 10, such Indemnified Person
shall notify such Lessee promptly of such Claim and provide such Lessee with all
documents and information relating solely to such Claim as may reasonably be
requested by such Lessee. If as described above, the contest of such Claim is
not to be conducted by and in the name of any Lessee, upon written request from
any Lessee within thirty (30) days after receipt of such notice, which written
request shall be accompanied by an opinion of independent tax counsel reasonably
satisfactory to such Indemnified Person (both as to counsel, substance and
conclusion) that good grounds exist for successfully contesting such Taxes, such
Indemnified Person shall contest in good faith (including, without limitation,
by pursuit of appeals) the validity, applicability or amount of such Taxes by,
in such Indemnified Person's sole discretion, (A) resisting payment thereof, (B)
not paying the same except under protest, if protest shall be necessary and
proper or (C) if payment shall be made, seeking a refund thereof in appropriate
administrative and judicial proceedings; provided, that in conducting such
contest, the Indemnified Person shall keep the Lessees informed, at any Lessee's
request, of the progress and nature of the contest and shall consult in good
faith with the Lessees regarding the conduct of the contest; provided further,
however, that in no event shall such Indemnified Person be requested to contest
or shall any Lessee be permitted to contest the imposition of any Tax for which
such Lessee has an indemnity obligation pursuant to this Section 10 unless (V)
no Lease Event of Default shall have occurred which is continuing; (W) such
Lessee shall have acknowledged and agreed in writing, in form and substance
satisfactory to such Indemnified Person, such Lessee's ability to pay as
incurred on an After-Tax Basis all reasonable costs and expenses that such
Indemnified Person shall incur in connection with contesting such Claim whether
or not successful (including, without limitation, all reasonable costs,
expenses, legal and accounting fees and disbursements); (X) if such contest
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shall involve payment of the Claim, such Lessee shall have advanced the amount
thereof to such Indemnified Person on an interest-free and After-Tax Basis; and
(Y) the contest is conducted by and in the name of such Lessee, such claim
exceeds U.S.$ 25,000 and shall not involve a risk of criminal liability, a
material risk of unindemnified civil liability or any material danger of the
sale, loss, seizure or forfeiture of any Collateral or the imposition of any
Lien (except if such Lessee shall have adequately bonded such Lien or otherwise
made provision to protect the interests of such Indemnified Person in a manner
reasonably acceptable to such Indemnified Person and Ex-Im Bank) on any
Collateral. Notwithstanding that the conditions set forth in the preceding
sentence may have been satisfied, such Indemnified Person may elect not to
contest pursuant to the preceding sentence or elect to discontinue any contest
proceeding commenced pursuant to the preceding sentence, but such election shall
constitute a waiver by such Indemnified Person of any right to payment of
indemnification pursuant to this Section 10 with respect to the adjustment which
was the subject of such proposed contest, plus any subsequent Taxes the contest
of which is precluded thereby and, if any Lessee has theretofore paid such
amounts or provided such Indemnified Person with funds to pay such amounts, such
Indemnified Person shall promptly repay such funds, together with interest
thereon at the same rate of interest as that paid, or which would have been
paid, by such Lessee in funding such payment of Taxes to Lessee. If such
Indemnified Person shall obtain a refund of, or shall be granted a credit
against Taxes all or any part of which any Lessee shall have paid for such
Indemnified Person or for which any Lessee shall have reimbursed such
Indemnified Person in connection with the contest of any Claim pursuant to this
Section 10(i), such Indemnified Person shall pay to such Lessee, but not before
all Lessees shall have made all payments then due to such Indemnified Person
pursuant to this Section 10 and any other payments then due to such Indemnified
Person from all Lessees under any of the Operative Documents and such
Indemnified Person shall have reasonably determined that funds have been made
available to it as a result of such refund or credit, an amount equal to the
amount of funds made available to it as a result of such refund or credit,
including interest received thereon, plus any Tax benefit (or minus any net Tax
detriment) realized by such Indemnified Person (in its own reasonable
discretion) as a result of receipt or accrual of such refund or credit and
payment by such Indemnified Person made pursuant to this sentence; provided that
any such payment (or any part thereof) shall not be required to be made if the
result of such payment would be to leave such Indemnified Person (in its own
reasonable discretion) in a position less favorable than it would have been in
had no such refund or credit been obtained or Tax Benefit been realized. If any
Indemnified Person shall have paid any Lessee any refund of all or part of any
Tax paid by such Lessee and it is subsequently determined that such Indemnified
Person was not entitled to the refund, such determination shall be treated as
the imposition of a Tax pursuant to the provisions of this Section 10(but
without giving effect to the exclusions in Section 10(d) (other than clauses
(ii), (iii), (iv) and (viii) thereof). Except in respect of any Tax Claim which
the Indemnified Person is not obligated to contest, no Indemnified Person shall
enter into a settlement or other compromise with respect to any Claim with
respect to which any Lessee would be required to indemnify hereunder without the
prior consent of such Lessee, unless such Indemnified Person waives its right to
be indemnified with respect to such Claim under this Section 10 or unless an
Event of Default is continuing.
(j) Withholding Taxes. Each Lessee agrees that all payments made by it
pursuant to this Agreement, each Lease to which it is a party and any other
Operative Document to which it is a party shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
Taxes of any nature whatsoever now or hereafter imposed, levied,
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collected, withheld or assessed by any Government Body or taxing authority (all
such Taxes being herein referred to as "WITHHOLDING TAXES"), If any Withholding
Taxes are so required to be withheld or deducted from any payment made by any
Lessee under any Operative Document, such Lessee shall (A) pay to the
appropriate Government Body the amount of such Withholding Taxes and make such
reports and filings in connection therewith in the time and manner required by
Applicable Laws, (B) at the time that the payment upon which the deduction or
withholding applies is required to be made, pay to the relevant Indemnified
Person any additional amount which is necessary in order for the net amounts
received by such Indemnified Person, after deduction or withholding of such
Withholding Taxes, to equal the amounts payable to such Indemnified Person had
no such deduction or withholding been required and (C) promptly forward to the
relevant Indemnified Person an official receipt or other documentation
evidencing payment of such Withholding Taxes to such Government Body. Each
Indemnified Person agrees to deliver to each applicable Lessee, at such Lessee's
sole cost and expense, such official certificates or documents as may be
reasonably requested by such Lessee in writing from time to time completed and
duly executed by such Indemnified Person to establish that payments by such
Lessee to such Indemnified Person hereunder or under any Lease or any other
Operative Document to which it is a party are, without any prejudice to such
Indemnified Person, exempt from or are subject to a reduced rate of Withholding
Tax imposed by any Government Body or taxing authority, so long as, in the
Indemnified Person's reasonable determination, it is entitled to claim such
reduction or exemption. If requested by such Indemnified Person in connection
with any request for certificates or documents hereunder, any applicable Lessee
shall provide such Indemnified Person with blank forms and instructions for
completion thereof.
If, pursuant to this Section 10(j), any Lessee or Lessor has paid any
additional amounts in respect of any Tax required to be withheld from any
payment in respect of any Tax excluded from indemnification pursuant to Section
10(d) hereof with respect to the Indemnified Person, and such Lessee or Lessor,
as the case may be, has paid over such withheld amount to the proper Government
Body or taxing authority for the account of such Indemnified Person, such Lessee
or Lessor, as the case may be, shall notify such Indemnified Person of the
amount of such withholding and provide to such Indemnified Person an official
receipt or other document satisfactory to such Indemnified Person evidencing
payment of the withheld amount
(k) Payment. Except in the case of Withholding Taxes (payment of and
indemnification with respect to which shall be governed by Section 10(j)), any
amounts payable to an Indemnified Person pursuant to this Section 10 in respect
of Taxes shall be paid within thirty (30) days after receipt of a written demand
therefore from such Indemnified Person accompanied by a written statement
describing in reasonable detail the amount so payable, but not before the date
such Tax is due. Any payments made pursuant to this Section 10 directly to an
Indemnified Person or any Lessee shall be made in the applicable currency in
immediately available funds at such bank or to such account as is specified by
the payee in written directions to the payor.
(l) Non-Parties. If an Indemnified Person is not a party to this
Agreement, any Lessee may require such Indemnified Person agree in writing, in a
form reasonably acceptable to such Lessee, to the terms of this Section 10 prior
to such Lessee making any payment under this Section 10 to such Indemnified
Person.
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(m) Tax Credit Payment. If a payment or an additional payment in respect
of a Claim for Taxes or Withholding Tax is made under this Section 10 by any
Lessee for the benefit of any Indemnified Person (other than Ex-Im Bank) and
such Indemnified Person, in its own reasonable discretion, determines that it
has obtained (and has derived, or would if it were to retain, derive full use
and benefit from) a credit against, or relief or remission for, or repayment of,
any Tax, then, if and to the extent that such Indemnified Person, in its sole
opinion, determines that such credit, relief, remission or repayment is in
respect of or calculated with reference to the payment or additional payment
made pursuant to this Section 10, such Indemnified Person shall, to the extent
that it can do so without prejudice to the retention of the amount of such
credit, relief, remission or repayment and so long as no Default is then
continuing, pay to such Lessee such amount as such Indemnified Person shall, in
its own reasonable discretion, determine to be the amount which will leave such
Indemnified Person (after such payment) in no worse after tax-position that it
would have been in had the payment or additional payment in question not been
required to be made by such Lessee.
(n) Tax Credit Clawback. If any Indemnified Person (other than Ex-Im Bank)
makes any payment to any Lessee pursuant to Section 10(m) and such Indemnified
Person subsequently determines, in its own reasonable discretion, that the
credit, relief, remission or repayment in respect of which such payment was made
was not available or has been withdrawn or that it was unable to use such
credit, relief, remission or repayment in full, such Lessee shall reimburse such
Indemnified Person such amount as such Indemnified Person determines, in its own
reasonable discretion, is necessary to place it in the same after-tax position
as it would have been in if the payment to such Lessee pursuant to Section 10(m)
had not been made.
(o) Conflicting Provisions. The general indemnification provisions of this
Section 10 are not intended to waive or supersede any express provisions of this
Agreement, the Lease, any Operating Lease or any other Operative Document
concerning the responsibility of any of the parties hereto or thereto for any
Claims and the fact that a Claim is not excluded from indemnification under
Section 10(d) shall in no event prevent any party hereto from bringing an action
against any Lessee, Operating Lessee or any Indemnified Person for any breach of
any obligation owing by such party to such other party giving rise to such
Claim.
(p) Survival. The indemnities and agreements provided for in this Section
10 shall survive the expiration or other termination of the Operative Documents.
(q) Reports and Returns. Each Lessee shall, at its own expense, duly file
all required reports and returns respecting all Taxes for which such Lessee is
directly responsible under this Section 10, to the extent such Lessee is
permitted to do so by law. If the same must be filed by an Indemnified Person,
such Lessee will advise such Indemnified Person of the necessity of filing the
same and, in sufficient time before the same are due, furnish such Indemnified
Person with a completed copy thereof and funds in the amount required to be
submitted, together with any additional information and records relating thereto
as such Indemnified Person may reasonably request. Each Lessee shall hold such
Indemnified Person harmless from and against any Claims arising out of any
insufficiency or inaccuracy in any such report or return to the extent such
insufficiency or inaccuracy is not attributable to any act or omission of or
information provided by such Indemnified Person or a Related Indemnitee. Each
Lessee shall make available to the Indemnified Person such other information and
records as are maintained
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by such Lessee regarding the use of the Aircraft at such Lessee's principal
place of business. If, in conjunction with the filing of any tax return or as a
result of an audit, an Indemnified Person reasonably requests additional
information, such Lessee shall make available such other information and records
as it maintains in the ordinary course of business or is reasonably available to
it.
SECTION 11. Lien Removal.
(a) Each Lessor Parent Trust Company, in its individual capacity, and each
Lessor Parent agrees to take such action as may be necessary and within its
power to discharge, or cause each related Lessor to discharge, any Lessor Liens
attributable to it or any of its Affiliates (including in the case of each
Lessor Parent Trust Company and each Lessor Parent, each related Lessor);
provided that the foregoing shall not apply to any Lessor Liens attributable to
claims either not yet due or being contested by appropriate proceedings in good
faith so long as such proceedings do not involve any risk of the sale,
forfeiture or loss of all or any part of any Aircraft, title to any thereof,
interest therein or use thereof.
(b) Without limiting the provisions in the second sentence of Section 6 of
each Lease, each Lessee agrees, for the benefit of the Secured Parties, that it
will promptly, at its own cost and expense, take such action as may be necessary
duly to discharge all Lessor Liens with respect to any Aircraft, title to any
thereof or any interest therein or in any Lease to which it is a party or any
related Operating Lease, if the same shall arise at any time, unless such Lessor
Lien is caused solely and directly by the giving of instructions by the Security
Trustee to any Person while no Lease Event of Default or Loan Event of Default
has occurred and is continuing.
(c) Each of the Secured Parties and Trust Company agrees to take such
action as may be necessary to discharge any Lender Liens on any Collateral
created by it or any of its Related Indemnitees or arising solely by reason of
its or any of its Related Indemnitee's acts or omissions.
SECTION 12. Expenses. Whether or not the transactions contemplated hereby
are consummated, GFC shall pay or reimburse Ex-Im Bank and the Security Trustee
as appropriate (against invoices and receipts (if available) submitted by any
such Person), for any reasonable costs and expenses (including reasonable fees
and disbursements of legal counsel and other experts employed or retained by
such Person) incurred by such Person, and all payments made, in either case
payable in connection with, arising out of or in any way related to the
negotiation, preparation, execution, delivery or enforcement of the Operative
Documents or the making of the Loans, including, if then owing, the initial and
annual fees of the Security Trustee (collectively, "TRANSACTION COSTS"). In
addition to the foregoing but without duplication, GFC shall pay or reimburse
Ex-Im Bank and the Security Trustee for any reasonable costs and expenses
(including reasonable fees and disbursements of legal counsel and other experts
employed or retained by such Person) incurred by such Person in connection with
any amendment, modification or waiver of any Operative Document requested by any
Lessee or the Guarantors or any filings or recordings of any Operative Document
required by the terms hereof or thereof.
All costs and expenses referred to in this Section 12 incurred in
connection with the negotiation, preparation, execution and delivery of the
Operative Documents (including, without
54
limitation, legal fees) shall (to the extent invoices and receipts have been
submitted to GFC prior to each Borrowing Date) be paid on such Borrowing Date.
SECTION 13. Creation of Trust; the Security Trustee; Successor Trustees;
Enforcement; Consent of Secured Parties; Right to Exercise Remedies.
(a) Creation of Trust. Subject to the terms hereof, each of the Lenders,
the Facility Agent, Ex-Im Bank, the Security Trustee and, in respect of the
Borrower Collateral only, each of the Secured Subordinated Parties, has
irrevocably established and each does hereby irrevocably establish a trust (the
"Trust") for the benefit of the Secured Parties and the Secured Subordinated
Parties; and each of the Lenders, the Facility Agent, Ex-Im Bank and the Secured
Subordinated Parties has granted, bargained, sold and conveyed, absolutely, and
by these presents does (or, upon execution and delivery hereof, will) hereby
grant, bargain, sell and convey, absolutely, unto the Security Trustee and its
successors in the Trust hereby created and their permitted assigns, all of their
estate, right, title and interest, now or hereinafter existing, in, to and under
(i) in the case of the Secured Parties, any and all of the Collateral,
including, without limitation, any and all proceeds (as such term is defined in
the Uniform Commercial Code) from the exercise thereof pledged or conveyed by
any Borrower, Lessor, Lessor Parent, Lessee Parent, Lessee or GFC for the
benefit of the Lenders, the Facility Agent, Ex-Im Bank and the Security Trustee
or any of them, (ii) in the case of the Secured Subordinated Parties, any and
all of the Borrower Collateral, including, without limitation, any and all
proceeds (as such term is defined in the Uniform Commercial Code) from the
exercise thereof pledged or conveyed by any Borrower, Lessor or Lessor Parent
for the benefit of the Secured Parties and the Secured Subordinated Parties or
any of them, and (iii) in the case of the Secured Parties, all of the rights of
the Secured Parties to elect any course of conduct under any Security Document
or otherwise in respect of the Collateral against any Borrower, Lessor, Lessee,
Operating Lessee, Lessor Parent, Lessee Parent, GFC or any other Person other
than pursuant to this Section 13, and all other rights and remedies of the
Secured Parties directly or indirectly relating to the foregoing, into the Trust
Estate:
TO HAVE AND TO HOLD all and singular the Trust Estate, whether now owned
or held or hereafter acquired, now or hereafter existing, unto the Security
Trustee, its successors in the Trust created hereby and its permitted assigns,
forever;
IN TRUST, NEVERTHELESS for the benefit and security, to the extent
provided herein, of the Secured Parties and, subject to Section 32, the Secured
Subordinated Parties, and for the enforcement of the payment of the Secured
Obligations and the Secured Subordinated Obligations in accordance with their
terms, and the observance and performance of the provisions of this Section 13,
and for the benefit of the Secured Parties and the Secured Subordinated Parties,
without preference, priority or distinction between each other except as
expressly provided in Section 32 and in the Security Documents, regardless of
the order of any filing or perfection thereof, or any law or judicial decision,
now or hereafter existing.
In confirmation of the foregoing, and in order to secure the Secured
Obligations each Borrower, Lessor, Lessee, GFC, Lessor Parent, and pursuant to
the terms of each Lessee Share Pledge Agreement, each Lessee Parent, hereby
confirms that it has granted, bargained, sold, conveyed, assigned, transferred,
mortgaged, hypothecated, pledged, confirmed and created each and all of the
Liens represented by the Security Documents and, in the case of GFC, hereunder
in
55
favor of the Security Trustee, for the benefit of the Secured Parties and, in
the case of the Borrower Collateral subject to Section 32, the Secured
Subordinated Parties, as mortgagee, assignee, pledgee or secured party, over all
of each such Borrower's, Lessor's, Lessee's, GFC's, Lessor Parent's and Lessee
Parent's right, title and interest in, to and under any and all of the property
comprising the Trust Estate (including all substitutions, replacements,
accessions, additions, and after-acquired property constituting a part thereof
and all products and proceeds thereof) pursuant to the respective terms of the
Security Documents. The Security Trustee shall be entitled to all of the rights
of a secured party under Applicable Law (including the Uniform Commercial Code
as in effect in any jurisdiction) with respect to the Collateral.
IT IS HEREBY COVENANTED, DECLARED AND AGREED by each of the parties hereto
that the Secured Obligations are to be secured, and that the Trust Estate is to
be held and disposed of by the Security Trustee, upon and subject to the
provisions of this Section 13, Section 21 and the Security Documents, and in the
event of any conflict between the terms of any Security Document and the terms
of this Agreement, as among the Secured Parties and the Secured Subordinated
Parties, the terms of this Section 13 shall prevail.
(b) Appointment as Security Trustee. Each of the Secured Parties and the
Secured Subordinated Parties hereby appoint Xxxxx Fargo Bank Northwest. National
Association to act as its security trustee under the Security Documents.
(c) Acceptance of Trust. Xxxxx Fargo Bank Northwest, National Association,
in its individual capacity and as Security Trustee, hereby confirms its and the
Security Trustee's acceptance, pursuant to this Section 13, of the Trust and the
duties hereby created and covenants and agrees to perform and observe all of the
Security Trustee's covenants and undertakings upon the terms of this Section 13,
Section 21 and the Security Documents, which shall govern the duties and
responsibilities of the Security Trustee to the Secured Parties and the Secured
Subordinated Parties and the rights of the Security Trustee with respect to the
Secured Parties and the Secured Subordinated Parties. The Security Trustee shall
not be answerable or accountable under any circumstances, except for its own
willful misconduct or gross negligence and its failure to use ordinary care in
receiving, handling or disbursing funds.
(d) Duties of the Security Trustee.
(i) Notices to Secured Parties. In the event the Security Trustee
shall have knowledge of the occurrence of any Lease Default, Loan Default,
Lease Event of Default or Loan Event of Default (each, a "DEFAULT EVENT")
under the Loan Agreement or any Lease, as the case may be, the Security
Trustee shall give prompt written notice thereof to the Borrowers and
Lessees and Ex-Im Bank and the Secured Parties, which notice shall set
forth in reasonable detail the circumstances known to the Security Trustee
with respect to such Default Event. Subject to Section 13(d)(iii), the
Security Trustee shall take such action, or refrain from taking such
action, with respect to such Default Event as the Security Trustee shall
be instructed in writing by the Instructing Group in accordance with this
Section 13, without reference or regard to any instructions of any Secured
Subordinated Party (unless such person is the Instructing Group).
(ii) Action Upon Instructions
56
(A) Subject to the terms of Sections 13(d)(i) and 13(d)(iii)
and except as otherwise provided in Section 13(d)(ii)(B), upon
written instructions at any time and from time to time of the
Instructing Group, the Security Trustee shall take such of the
following actions as may be specified in such written instructions:
(i) exercise such election or option, or make such decision or
determination, or give such notice, consent, waiver or approval or
exercise such right, remedy or power or take such other action
hereunder or under any other Operative Document or in respect of any
part or all of the Collateral, as shall be specified in such written
instructions; (ii) approve as satisfactory to the Security Trustee
all matters expressly required by the terms hereof or of any other
Operative Document to be satisfactory to the Security Trustee, it
being understood that without the written instructions, the Security
Trustee shall not approve any such matter as satisfactory to the
Security Trustee; (iii) take such action with respect to, or to
preserve or protect, the Collateral (including the discharge of
Liens) as shall be specified in such written instructions and as are
consistent with the terms hereunder and with the other Operative
Documents; and (iv) take such other action in respect of the subject
matter of this Section 13 as shall be specified in such written
instructions. No implied duties or obligations shall be read into
this Agreement or any other Operative Document against the Security
Trustee. Nothing in this Section 13(d)(ii) shall impair the right of
(nor impose any obligation on) the Security Trustee, in its
discretion, to take or omit to take in good faith any action that
the Security Trustee in good faith determines to be reasonably
necessary or appropriate in order to carry out said written
instructions or to perform any of its duties expressly set forth
herein or in any other Operative Document.
(B) The Security Trustee agrees to provide to GFC and each of
the Secured Parties, concurrently with the taking by the Security
Trustee of any action pursuant to Section 13(d)(ii)(A), with notice
of the taking of such action by the Security Trustee; provided that
the failure to give any such notice to such persons shall not affect
the validity of such exercise.
(C) Subject to Section 13(d)(ii)(A), if the Security Trustee
shall not have received written instructions from the Instructing
Group as provided in Section 13(d)(i) within twenty (20) days after
the mailing of notice of such Default Event to the Secured Parties,
the Security Trustee may, subject to written instructions thereafter
received pursuant to the provisions of Section 13(d)(i), take such
action, or refrain from taking such action, but shall be under no
duty to take or refrain from taking any action, with respect to such
Default Event as it shall determine advisable in the best interests
of the Secured Parties and shall use the same degree of care and
skill in connection therewith as a prudent person would use under
the circumstances in the conduct of his or her own affairs. In the
absence of actual knowledge of an officer in the Corporate Trust
Department or its equivalent of the Security Trustee, the Security
Trustee shall not be deemed to have knowledge of any Default Event
unless notified in writing of such Default or Event of Default by
Ex-Im Bank, any Lender, the Facility Agent or any Secured
Subordinated Party.
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(iii) Indemnification. The Security Trustee shall not be required to
take any action or refrain from taking any action hereunder or under any
other Operative Document unless the Security Trustee shall have been
indemnified against any liability, cost or expense (including legal fees)
which may be incurred in connection therewith. The Security Trustee shall
not be under any obligation to take any action hereunder and nothing
contained hereunder (other than the second sentence of Section
13(e)(i)(A)) or in any other Operative Document shall require the Security
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it. The
Security Trustee shall not be required to take any action under Section
13(d)(i) or 13(d)(ii), nor shall any other provision hereunder be deemed
to impose a duty on the Security Trustee to take any action, if the
Security Trustee shall have been advised by its counsel that such action
is contrary to the terms hereof, any the Lease or of the other Operative
Documents or is otherwise contrary to law.
(iv) Purchase of Aircraft. Upon any purchase of any Aircraft by a
Lessee or its designee pursuant to the terms of Section 5 of the Lease for
such Aircraft and provided the Secured Obligations represented by or
relating to such Aircraft and any other Secured Obligations then due and
owing have been finally paid in full, the Security Trustee agrees that it
will, at such Lessee's sole cost and expense, execute such documents as
may be reasonably requested by such Lessee or GFC to release such Aircraft
from the Lien of the Security Documents.
(v) Notices, Etc. The Security Trustee shall deliver to each Secured
Party promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements, opinions
and other instruments received by the Security Trustee from any Borrower,
Lessor, Lessee, Lessor Parent, Lessee Parent or any Guarantor, in
connection with the Collateral or under or pursuant to any Operative
Document. If the notice or other written communication requests the
Security Trustee to take any action or give any consent, waiver, approval
or acknowledgment of satisfaction, other than as the Security Trustee is
expressly permitted by the terms hereof or of any other Operative Document
(as specified in such notice or written communication) to take or give
without the prior consent of the Secured Parties, the Security Trustee
shall request the Instructing Group to provide written instructions with
respect thereto.
(vi) Release. Upon the final payment and discharge in full of all
outstanding Secured Obligations and, in respect of the Borrower
Collateral, the Secured Subordinated Obligations, the Security Trustee
shall release the Lien of the Security Documents, and the Security Trustee
shall forthwith deliver, or cause to be delivered, evidence of the release
of such Liens and any remaining Collateral to the grantor of such
Collateral, at the sole cost and expense of GFC.
(e) The Security Trustee.
(i) Absence of Duties.
58
(ii) No Amendments, Etc. Subject to Section 13(d)(ii)(C), the
Security Trustee shall not without the prior instructions of the
Instructing Group amend, alter, vary or modify, or give any consent, make
any determination or waive any condition under, any of the Operative
Documents (insofar as such amendment, alteration, variation, modification,
consent, determination or waiver affects or relates only to the
Collateral), and provided that the Security Trustee shall not without the
prior consent of the Facility Agent (acting upon the instructions of the
Lenders) (A) amend, vary, modify or alter the terms of, give any consent
or waive any condition in relation to, the terms of any Lease or any other
Operative Document insofar as such amendment, variation, modification,
alteration, consent or waiver relates to the payment of Basic Rent, (B)
amend, vary, modify or alter the terms of, or give any consent in relation
to, third party legal liability insurances (including the identity of the
Additional Insureds) or the amount of hull insurance required to be
maintained by any Lessee under the Lease for any Aircraft and (C) except
in accordance with Section 13(d)(vi), affect the recording or priority of
the Lien of the Security Documents on all or any portion of the Collateral
or release the Lien on all or any portion of the Collateral.
(iii) Limitation on Exercise of Remedies by Lenders and/or the
Facility Agent. Notwithstanding any other provision hereunder or any other
Operative Document, each Lender and the Facility Agent shall be entitled
to bring suit against any Lessee or Guarantor in its own name for its own
account (or, in the case of the Facility Agent, in the name of one or more
Lenders and for their own account) (but not in the name of the Security
Trustee) to recover amounts, directly or indirectly, payable to or
receivable by it pursuant to any Operative Document which are not covered
by the Ex-Im Bank Guarantee and each Lessee and GFC agrees, for the
benefit of the Facility Agent and the Lenders to perform in favor of the
Facility Agent and the Lenders, those obligations expressed to be
performed for the Facility Agent and the Lenders by each such Person under
the Operative Document; provided, so long as the Ex-Im Bank Guarantee
shall be in effect or Ex-Im Bank shall have any exposure to liability or
is owed any amounts arising out of the Operative Documents, that (i) no
recovery from any such suit shall be had directly from, and no such suit
shall assert any rights or claims against any Borrower, the Collateral or
the Trust Estate (or any part of the collateral securing any other
obligation running to or for the benefit of or otherwise relating to any
transaction involving Ex-Im Bank) or any Lessee's interest in the assets
constituting a part thereof, (ii) such action does not interfere with, or
otherwise adversely affect, any restructuring, enforcement or other
collection efforts by, or on behalf of, Ex-Im Bank (other than by
requiring payment of moneys then due to such Person but only to the extent
enforcement is on assets not constituting part of the Collateral or the
Trust Estate or part of the collateral securing any other obligation
running to or for the benefit of or otherwise relating to any transaction
involving Ex-Im Bank), (iii) such Lender and the Facility Agent shall not
initiate any bankruptcy, suspension of payment or other insolvency
proceedings against any Borrower, Lessee or Guarantor in connection with
such recovery, and (iv) the Instructing Group shall not have sent a notice
to the Security Trustee, the Facility Agent or such Lender pursuant to the
next succeeding sentence. If such action does materially interfere with
the enforcement or remedial actions which are being taken or could be
taken by the Instructing Group or the Security Trustee, or otherwise
materially adversely affects Ex-Im Bank or the Security Trustee, then upon
the
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Instructing Group giving notice thereof to such Lender or, as the case may
be, the Facility Agent, shall cease such suit or take such action as the
Instructing Group may direct and if any judgments or remedies have been
obtained against any Borrower, Lessee, Guarantor or their respective
assets, such judgments or remedies shall immediately be assigned to, and
vest with, the Security Trustee without any further action or activity
hereunder. The Security Trustee and the relevant Lender and the Facility
Agent shall provide Ex-Im Bank with such information as Ex-Im Bank may
reasonably request regarding any collection efforts by or on behalf of
such Person.
(iv) Enforcement by the Lenders. Notwithstanding Section 13(g)(i),
if at any time while any amounts (other than principal of and scheduled
interest on the Loans) remain owing to the Facility Agent or the Lenders
under the Operative Documents, any Borrower fails to pay any such amounts
or a declaration is made under Section 10.2 of the Loan Agreement, then
the Lenders may instruct the Security Trustee to, and the Security Trustee
shall, make a demand under the GATX Guarantee in respect of such amounts
and, subject to Section 13(g)(iii), the Security Trustee shall be entitled
to, and shall at the direction of the Facility Agent, exercise any right
or remedy available to the Security Trustee under the GATX Guarantee to
recover such amounts.
(h) Right to Exercise Remedies.
(i) General. So long as an Event of Default shall have occurred and
be continuing, then and in every such case, the Security Trustee, acting
pursuant to this Section 13 and the Security Documents as applicable, may
exercise any or all of the rights and powers and pursue any and all of the
remedies available to the Security Trustee under the Security Documents
or, pursuant thereto, the Operative Documents and may proceed to protect
and enforce all or any of the foregoing, by suit or suits or proceedings
in equity, at law or in bankruptcy, and whether for the specific
performance of any covenant or agreement herein or therein contained or in
execution or aid of any power herein or therein granted, or for
foreclosure under any Security Document, or for the appointment of a
receiver or receivers for the Collateral or any portion thereof, or for
the recovery of judgment for the Indebtedness secured by the Liens created
under the Security Documents or for the enforcement of any other proper,
legal or equitable remedy available under applicable law, may recover
judgment in its own name as the Security Trustee against the Collateral
and may take possession of all or any part of the Collateral and may
exclude, in the case of Loan Event of Default, each Borrower, Lessor and
Lessor Parent, and in the case of a Lease Event of Default, the relevant
Lessee, each Lessee Parent and all Persons claiming under any of them
wholly or partly therefrom. In connection therewith, the Security Trustee
may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the Indebtedness secured under the
Security Documents allowed in any judicial proceedings relating to each of
the Borrower, Lessor, Lessee, its creditors, or its property, as
applicable, in any jurisdiction.
(ii) Cumulative Remedies. Each and every right, power and remedy
herein given to the Security Trustee specifically or otherwise hereunder
or in any other Operative Document shall be cumulative and shall be in
addition to every other right, power and remedy whether specifically
herein given or otherwise existing, may be
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exercised from time to time and as often in such order as may be deemed
expedient by the Security Trustee, and the exercise or the beginning of the
exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by the Security Trustee in the exercise of any
right, remedy or power or in pursuing any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of any
Borrower, Lessor, Lessor Parent, Lessee Parent or Lessee or to be an
acquiescence therein.
(iii) Proceedings.
(A) Notwithstanding any other provisions hereof, if any
payment of principal of, interest on any Loans or any Rent under any
Operative Document shall not be made when and as the same shall
become due and payable, the Security Trustee shall be entitled to
recover judgment, in its own name and as trustee of an express
trust, upon such Operative Document for the whole amount of such
principal, interest or Rent, as the case may be, remaining unpaid,
and each Secured Party shall take all such action as the Security
Trustee may reasonably request in order to accomplish the foregoing.
(B) The Security Trustee may maintain any proceeding to
enforce the rights of any Secured Party hereunder or under any other
Operative Document to which it is a party even if it does not
possess any Operative Document or does not produce any of them in
any proceeding. A delay or omission by the Security Trustee or any
Secured Party in exercising any right or remedy accruing upon a
Default Event shall not impair any right or remedy in respect of, or
constitute a waiver of or acquiescence in, such Default Event.
(i) Power of Attorney. In consideration for the entry by the
Security Trustee into the agreements contained in this Section 13, each
Borrower, Lessor, Lessee, and Lessor Parent does hereby irrevocably constitute
and appoint the Security Trustee its true and lawful attorney-in-fact,
exercisable upon the occurrence and during the continuation (in the case of such
appointment by each Lessee) of a Lease Event of Default or (in the case of such
appointment by each Borrower, Lessor and Lessor Parent) Loan Event of Default
with full power (in the name of such grantor or otherwise) and at the expense of
the Security Trustee as herein provided, and for the use and benefit of the
Secured Parties, which power is irrevocable, is given in connection with
security, and is coupled and deemed coupled with an interest, to ask for,
require, demand, receive, collect, compound and give acquittance and discharge
for, any and all rights, claims, proceeds (as such term is defined in the
Uniform Commercial Code), moneys due and to become due arising out of the
Collateral, to endorse checks, instruments, pleadings, writs; and apply for
orders, injunctive relief and court intervention in any jurisdiction in
connection therewith, and to settle, compromise, compound or adjust all of the
foregoing; including any powers or remedies of any kind and description arising
out of the Liens on the Collateral, whether in the name of any Borrower, Lessor,
Lessee or Lessee Parent, or for itself, and to prosecute, compromise and settle
any suits, actions or proceedings in any court in any jurisdiction, to collect
all such proceeds (as such term is defined in the Uniform Commercial Code) or
enforce all such rights in respect thereof and in respect of all other claims,
rights, powers and remedies of every kind and
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description of the Secured Parties and the Security Trustee's own and
individual capacity arising out of this Section 13, the Trust Estate and the
Liens on the Collateral; and, in accordance with the terms of the other
Operative Documents, to sell, assign, transfer, pledge, make any agreement with
respect to and otherwise deal with the Collateral (including, without
limitation, any Aircraft, any Engine or any Part), and any of such other claims,
rights, powers and remedies as fully and completely as though the Security
Trustee, pursuant to the irrevocable power coupled with an interest granted
hereby, were the absolute legal and beneficial owner thereof for all purposes;
and at such times, in such manner and in such order as may seem to the Security
Trustee from time to time to be reasonably necessary, advisable or proper, all
in its absolute discretion, in furtherance of the irrevocable power coupled with
an interest granted to it pursuant to this Section 13(i). In the event that the
Security Trustee shall at any time enforce its rights in respect of the
Collateral under any of the Security Documents, the Security Trustee shall
forthwith notify each of the Facility Agent and Ex-Im Bank thereof. For the
avoidance of doubt, the Security Trustee (without limitation) is specifically
entitled hereunder, in accordance with the terms of the other Operative
Documents, to foreclose any Lien on any Aircraft pursuant to the rights and
remedies provided herein, in the other Security Documents, and is specifically
entitled and authorized, in furtherance of the foregoing, to apply for and
obtain the de-registration of any Aircraft in any jurisdiction and to
re-register any Aircraft, in any other jurisdiction, all as the Security Trustee
may select, pursuant to the irrevocable power coupled with an interest granted
by this Section 13(i). The Security Trustee has agreed to assume the obligations
imposed upon it hereunder in consideration for, among other things, the
irrevocable power coupled with an interest set forth in this Section 13(i),
which power is of the essence of the agreements contained in this Section 13.
(j) Application of Rent and Debt Service. To the extent received by it the
Security Trustee covenants and agrees to apply Rent and all payments received by
it under the Operative Documents when and as the same shall be received in the
order of priorities specified in Section 21.
(k) Maintenance of the Security Account.
(i) On or prior to the first Borrowing Date the Trust Company shall
establish and maintain in the name of the Security Trustee the Security
Account.
(ii) The Trust Company hereby agrees that (i) the Security Account
will be, and will be maintained as, a Securities Account (as defined in
Section 8-501(a) of the UCC) of which it is the Securities Intermediary
and in respect of which the Security Trustee is the "entitlement holder"
(as defined in Section 8-102(a)(7) of the UCC) of the "securities
entitlement" (as defined in Section 8-102(a)(17) of the UCC) with respect
to each "financial asset" (as defined in Section 8-102(a)(9) of the UCC)
credited to such account, (ii) all Security Amounts and other cash
received by the Security Trustee or the Trust Company for deposit in the
Security Account, and all other property acquired with such Security
Amounts or cash, will be credited to the Security Account, (iii) all items
of property (whether cash, investment property, Permitted Investments,
other investments, securities, instruments or other property credited to
Security Account will be treated as a "financial asset" (as defined in
Section 8-102(a)(9) of the UCC) under Article 8 of the UCC, (iv) its
"securities intermediary's jurisdiction" (as defined in Section 8-110(e)
of the
62
UCC) with respect to the Security Account is the State of Utah and (v) all
securities, instruments and other property in order or registered from and
credited to the Security Account shall be payable to or to the order of,
or registered in the name of, the Trust Company or shall be indorsed to
the Trust Company or in blank, and in no case whatsoever shall any
financial asset credited to the Security Account be registered in the name
of GFC, payable to or to the order of GFC or specially indorsed to GFC
except to the extent the foregoing have been specially endorsed by GFC to
the Trust Company in blank. The Trust Company agrees that, until otherwise
notified in writing by the Instructing Group, the Trust Company will
follow the written directions and instructions of the Security Trustee, to
the extent it is required to follow those of the Security Trustee except
that, (i) with respect to withdrawals from the Security Account it will
follow the directions and instructions of the Instructing Group, as the
agent for the Security Trustee (the Security Trustee hereby appointing the
Instructing Group as its agent for such purpose) and (ii) with respect to
investment of funds on deposit in the Security Account it will follow the
directions and instructions of the Person entitled to direct and instruct
it under Section 21(e)(ii).
(iii) The Security Trustee agrees that it will hold (and will
indicate clearly in the books and records that it holds) its "security
entitlement" to the "financial asset" credited to the Security Account in
trust for the Secured Parties (but subject to the subordination provisions
hereof).
(l) Miscellaneous.
(i) Termination. Upon receipt by the Security Trustee of evidence
satisfactory to it of the indefeasible and final payment in full of all of
the Secured Obligations (including, without limitation, the reasonable
compensation, expenses and disbursements of the Security Trustee), the
agreements contained in this Section 13 and the trusts created thereby
shall terminate and the Security Trustee, at the request of GFC, will
execute and deliver to GFC, at no cost to the Security Trustee or any
Secured Party, a proper instrument or instruments acknowledging the
satisfaction and termination of the agreements contained in this Section
13 and the trusts created thereby, the Security Documents and will duly
assign, transfer and deliver to GFC, all of the rights and moneys at the
time held by the Security Trustee hereunder or any other Security Document
and will execute any other instrument reasonably requested by GFC in
connection with the foregoing.
Turnover of Collateral. If any Secured Party or Secured Subordinated Party
acquires custody, control or possession of any Collateral or proceeds therefrom,
other than by (A) distribution from the Security Trustee pursuant to this
Agreement (but excluding any recoveries made by the Lenders pursuant to Sections
13(g)(iii) or 13(g)(iv)) or (B) any payments to it permitted under the
Participation Agreement or any Security Documents, then such Secured Party or
Secured Subordinated Party shall promptly cause such Collateral or proceeds to
be delivered to or put in the custody, possession or control of the Security
Trustee for disposition or distribution in accordance with the provisions of
Section 21; provided that, so long as no Event of Default has occurred which is
continuing, Lessees Parties may make payments that are due and payable to their
respective Lessee Parents.
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(ii) Until such lime as the provisions of the immediately preceding
sentence have been complied with, such Secured Party shall be deemed to
hold all such Collateral and proceeds in trust for the parties entitled
thereto hereunder; provided that where any payment made by or received or
recovered from any Borrower or Lessee (the "FIRST OBLIGOR") under any
Operative Document in or towards or for the purpose of discharging an
obligation (the "FIRST OBLIGATION") of such Person under such Operative
Document is required hereunder to be applied (and is so applied) in or
towards discharging any other obligation(s) (the "SECOND OBLIGATION(S)")
of such First Obligor under any Operative Document (the amount so applied
in discharging the Second Obligation, the "APPLIED AMOUNT") such First
Obligation shall (to the extent that the Second Obligation is thereby
discharged) be deemed automatically reinstated and not so discharged to
the extent of the Applied Amount and shall be construed and be owed
accordingly under the Operative Documents.
(iii) Assignment. All the provisions of this Section 13 shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that none of the
Borrowers or Lessees may assign or transfer any of their respective rights
or obligations under this Section 13 without the prior written consent of
Ex-Im Bank, the Security Trustee and the Facility Agent, and no such
assignment or transfer of any such obligation shall relieve any Borrower
or Lessee therefrom, unless Ex-Im Bank, the Security Trustee and the
Facility Agent shall have consented to such release in writing
specifically referring to the obligation from which any Borrower or Lessee
is to be released. Each party which assigns (other than by way of
security), transfers or novates any of its rights or obligations under any
Operative Document shall at the same time assign, transfer or novate the
corresponding rights and obligations under this Section 13.
(iv) Further Assurances, Etc. Each of the Borrowers and Lessees
agrees from time to time to do or cause to be done and perform such other
and further acts and execute and deliver or cause to be executed and
delivered any and all such other instruments as may be required by law or
reasonably requested by the Security Trustee to assure its title to and
interest in each Aircraft, each Airframe, each Engine and the Parts and to
establish, maintain and protect the rights and remedies of the Security
Trustee and to carry out and effect the intent and purpose of this Section
13 in respect thereof, all at the cost and expense of GFC.
SECTION 14. Confidentiality. Except to the extent necessary for the
exercise of its rights and remedies and the performance of its obligations under
the Operative Documents and as may be required under Applicable Laws (but
without prejudice to the provisions of Section 11.13 or 12.6(d) of the Loan
Agreement), no party hereto (other than Ex-Im Bank) will itself use or
intentionally disclose (and will not permit the use or disclosure by any of its
Affiliates of), directly or indirectly, any information obtained from any other
party hereunder or in connection herewith or any portion of any Operative
Document, and each party (other than Ex-Im Bank) will use all reasonable efforts
to have all such information kept confidential and not used in any way known to
such party to be detrimental to any other; provided, that such party may use,
retain and disclose any such information (a) to its legal counsel, aircraft and
technical
64
advisers, public accountants, other professional advisers or process agent,
provided that such Person shall keep such information confidential at least to
the same extent provided herein, (b) to any Government Body requesting such
disclosure, (c) in the case of GFC or the Lenders, to any rating agency in
connection with any transaction related to the Lender's funding of any Loan or
involving such Lender's Interest, subject to such rating agency's customary
procedures for the handling of such information, (d) that has been publicly
disclosed and (e) pursuant to Applicable Laws, and that such party may use and
retain (but not disclose externally) any such information for such party's own
internal research purposes.
SECTION 15. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES AS AGAINST THE OTHER PARTIES HERETO ANY RIGHTS IT MAY HAVE TO A JURY
TRIAL IN RESPECT OF ANY CIVIL ACTION ARISING UNDER THIS AGREEMENT OR ANY OTHER
OPERATIVE DOCUMENT.
SECTION 16. Loan Acceleration; Mandatory Prepayment.
(a) If for any reason whatsoever any Loan for an Aircraft is expressed to
become due and payable or becomes due and payable in full under any provision of
the Loan Agreement, then on the date on which such Loan is expressed to become
due and payable or becomes due and payable in full by the relevant Borrower
under the Loan Agreement, the Lessee of such Aircraft shall pay to such Borrower
the sum of (i) the relevant Termination Value applicable to such date, (ii) any
accrued but unpaid Rent (including, without limitation, amounts corresponding to
accrued interest on the relevant Loan through the date of prepayment) and (iii)
all other amounts then due and payable by such Lessee under the related Lease
and the other Operative Documents.
(b) In the event that any Borrower is obliged to or becomes obliged to
prepay the whole or any part of the Loan relating to an Aircraft under the Loan
Agreement in a circumstance where the whole of such Loan is not due and payable,
then the Lessee for such Aircraft shall on the date which such Borrower is
obliged to make the relevant prepayment under the Loan Agreement pay to such
Borrower an amount equal to the relevant amount of the prepayment to be paid
under the Loan Agreement. Any payment made by such Lessee pursuant to the
preceding sentence shall (as it relates to principal) correspondingly reduce the
Termination Value thereafter payable under the applicable Lease. Promptly
following any payment by any Lessee to any Borrower pursuant to this Section
16(b), the Facility Agent shall prepare revised schedules in substitution for
the then current schedules to the relevant Lease. Such revised schedules shall
be prepared on the same basis as the revised schedules prepared in accordance
with the Loan Agreement to reflect that the payment of Basic Rent and
Termination Value under such Lease shall be in an amount which is sufficient to
repay such Loan and interest thereon under the Loan Agreement. The revised
schedules shall be submitted to such Borrower, such Lessee, the Lenders and
Ex-Im Bank for approval (which approval shall not be unreasonably withheld or
delayed). Following approval by such parties, the revised schedules shall be
substituted for the then existing schedules and henceforth all payments to be
made by such Lessee under such Lease shall be made in accordance with such
substituted schedules.
SECTION 17. Minimum Rent. Notwithstanding anything contained in this
Agreement, the Lease for an Aircraft or any other Operative Document to the
contrary, each payment of
65
Basic Rent in respect of an Aircraft payable under such Lease shall equal under
all circumstances and in any event, an amount at least sufficient for the
Borrower of the Loan related to such Aircraft to pay the principal of and
interest (including any interest on overdue principal and, to the extent
permitted by applicable laws, overdue interest) on such Loan required to be paid
by such Borrower on each payment date under the Loan Agreement corresponding to
the due date of such installment of Basic Rent.
SECTION 18. Lessee's Right to Perform for Lessor. If any Borrower fails to
make any payment of any amounts required to be made by it hereunder or under any
other Operative Document or fails to perform or comply with any of its
agreements contained herein or in any other Operative Document and such failure
can be cured with the payment of money, any Lessee may, on behalf of any such
Borrower, and upon prior notice to such Borrower, Ex-Im Bank, the Security
Trustee and the Facility Agent, itself make such payment and such payment shall
be a cure in respect of any default that has occurred as a result of such
Borrower's failure to pay such amount or to perform or comply with such
agreement, as the case may be. The amount of any such payment and the amount of
the reasonable expenses of such Lessee incurred in connection with such payment,
together with interest thereon, to the extent permitted by Applicable Laws, at
the Post-Default Rate, shall be payable by the applicable Borrower to such
Lessee upon demand (after satisfying in full all of Lessor's obligations under
the Operative Documents).
SECTION 19. Complete Agreement. Except for the other Operative Documents
this Agreement contains the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes all prior written or oral
communications or agreements with respect thereto.
SECTION 20. No Discharge, Etc.
(a) Each Obligor and GFC waives presentation to, demand of payment from,
and protest to, any other Obligor or GFC of any of such other Person's
obligations under this Agreement or any other Operative Document, and also
waives notice of protest for nonpayment. The obligations of each Obligor and GFC
under this Agreement and the other Operative Documents shall not be affected by
(i) the failure of Ex-Im Bank, the Facility Agent, the Security Trustee or any
Lender to assert any claim or demand or to enforce any right or remedy against
any such other Person under the provisions of this Agreement or any other
Operative Document or otherwise; (ii) any extension or renewal of any thereof;
or (iii) the release of any of the security held by any of Ex-Im Bank, the
Security Trustee, the Facility Agent or any Lender with respect to this
Agreement or any other Operative Document.
(b) The obligations of each Obligor and GFC under this Agreement and the
other Operative Documents shall not be subject to any reduction, limitation,
impairment or termination or any defense or setoff, counterclaim, recoupment or
termination whatsoever in any case by reason of the invalidity, illegality or
unenforceability of this Agreement, any Note or any other Operative Document
against any other Person. Without limiting the generality of the foregoing, the
obligations of each Obligor and GFC under this Agreement and each other
Operative Document shall not be discharged or impaired or otherwise affected by
the failure of any of Ex-Im Bank, the Facility Agent, the Security Trustee or
any Lender to assert any claim or demand or to enforce any remedy under this
Agreement, any Note or any other Operative Document, by any
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waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of this Agreement by any other Person or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of each Obligor or GFC or
would otherwise operate as a discharge of each Obligor or GFC as a matter of law
or equity.
SECTION 21. Assignment of Rent, Security Deposits; Application of Funds.
(a) Assignment of Rentals. So long as the Lien of the Security Documents
shall not have been discharged pursuant to the terms thereof, in respect of each
Aircraft, the Lessor for such Aircraft hereby directs, and the Lessee for such
Aircraft hereby agrees, that all Basic Rent payable to such Lessor under the
applicable Lease for such Aircraft shall be paid directly to the Facility Agent
(unless a Lease Event of Default or a Loan Event of Default shall have occurred
and be continuing and Ex-Im Bank or the Security Trustee has given notice to the
Facility Agent and such Lessor in which case such Basic Rent shall be paid
directly to the Security Trustee) for application and payment in accordance with
Section 21(b) hereof. Each Lessor and Lessee agrees that all Supplemental Rent
due and payable under any Lease or "Supplemental Rent" under and as defined in
the Operating Lease, as the case may be, shall be paid directly to the Person to
whom such amounts are owed pursuant to the Operative Documents.
(b) Receipt, Distribution and Application of Funds. Subject to Section 22.
anything contained in this Agreement, any Lease, any Sublease, any Operating
Lease or any other Operative Document to the contrary notwithstanding, in
respect of an Aircraft, any payments under or pursuant to any Operative Document
(including, without limitation, all Basic Rent, Supplemental Rent, principal and
interest on the Loans, fees, indemnities or any other amount payable hereunder
or thereunder) which are received by GFC, any Lessor, any Lessee the Facility
Agent or any Lender (other than from the Security Trustee as a result of a
distribution pursuant to the applicable provisions of Appendix AF (Application
of Funds)) shall be distributed, applied and paid pursuant to the applicable
provisions of Appendix AF (Application of Funds).
(c) Time of Payments. Unless the Security Trustee shall have received
written instructions in accordance with the provisions hereof as to the times at
which any amounts are to be distributed pursuant to this Section 21 (in which
case the Security Trustee shall promptly comply with such instructions), all
distributions pursuant to this Section 21 shall be made as promptly as the
Security Trustee shall in its good faith and discretion determine to be
reasonable and practicable under the circumstances, given the amount available
for distribution or transfer in the relevant account, the time at which the next
addition to such account is expected to be made, and the cost of distributing
funds to the Secured Parties and other persons entitled to receive the same. The
Security Trustee shall at all times have the right to request distribution
instructions, including as to the time of such distribution.
(d) Distribution by Security Trustee. The Security Trustee covenants and
agrees that if the Security Trustee, prior to 9:30 a.m. (New York time) on any
Business Day has possession of any money distributable to any of the Facility
Agent or any of the Lenders or Ex-Im Bank under any of the Operative Documents
or any such monies have been credited, or received for credit, to the Security
Trustee's account and the Security Trustee fails to transmit such money to
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the relevant Person before 12:00 noon. (New York time) on the same Business Day,
then the Security Trustee shall on demand pay interest on such amount from the
date of such credit or receipt to the date of payment to the relevant Person at
a rate per annum equal to the Post-Default Rate from time to time.
(e) Investment of Amounts.
(i) Pending the disbursement thereof pursuant to the terms of this
Agreement, all cash from time to time held by the Security Trustee (other
than in the Security Account) shall be invested by the Security Trustee
pursuant to written instructions of GFC (or, if a Material Default or
Event of Default shall have occurred and be continuing, the Instructing
Group) in Permitted Investments.
(ii) Pending disbursement thereof pursuant to the terms of this
Agreement, GFC shall, on behalf of the Security Trustee, direct the Trust
Company in writing to invest and reinvest the funds on deposit in the
Security Account in Permitted Investments; provided, however, that if a
Material Default or an Event of Default shall have occurred and be
continuing, the Instructing Group shall so direct the Trust Company.
(iii) All reasonable commissions and other costs and expenses
incurred by the Security Trustee or the Trust Company in connection with
the acquisition or disposition by it of Permitted Investments may be
deducted by the Security Trustee from the income received by the Security
Trustee or the Trust Company with respect thereto, and all losses, if any,
shall be charged against the principal so invested.
(iv) Income from each investment made in accordance with this
Section 21(e) shall be credited to the account in which the invested
funds were held.
(v) Neither the Security Trustee nor any other Secured Party shall
be liable or responsible for any losses on investments made in accordance
with this Section 21(e).
(vi) Any investments under this Section 21(e) or Section 13(k)
shall be at the expense and risk of the Borrowers or Lessees, as the case
may be.
(f) (i) The parties hereto agree that, so long as no Review Notice has
been issued under Appendix MP, any and all Operating Lease Rent may be
paid directly to the relevant Operating Lessor or as such Operating Lessor
directs.
(ii) Each Lessee Party and GFC agrees that, following the issuance
to GFC of a Review Notice, then Ex-Im Bank may by notice in writing
(copied to GFC) instruct the Security Trustee to direct each Operating
Lessee to make any and all payments of Operating Lease Rent to the
Security Trustee for application by it under Section 21(b).
(iii) Following receipt by GFC of a notice from Ex-Im Bank under
Section 21(f)(ii), GFC shall use all reasonable endeavors to facilitate
the redirection of Operating Lease Rent payments to the Security Trustee,
including without limitation, use all reasonable endeavors to procure any
permits, approvals or authorizations from any
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Government Body required under the Applicable Law of any Relevant
Jurisdiction relating to an Aircraft.
(iv) Sections 21(f)(ii) and (iii) shall no longer apply in relation
to any Review Notice if (1) the procedures described in paragraph 1.2 of
Appendix MP are completed, (2) no notice of a Mandatory Prepayment Event
has been issued (as contemplated by paragraph 1.3 of Appendix MP) and (3)
Ex-Im Bank has not required that any additional security be provided or
other solution implemented (as contemplated by paragraph 1.3 of Appendix
MP), in each case following the issuance of such Review Notice, and
(without prejudice to Section 21(f)(v)) in such circumstances the
Operating Lessors shall (unless and until a further Review Notice is
issued under Appendix MP) be entitled to require that all Operating Lease
Rent be paid directly to them or as such Operating Lessor directs.
(v) The parties agree that this Section 21(f) shall not in any way
limit the rights and remedies of the Security Trustee under the Operating
Lessor Security Assignments or the other provisions of this Section 21:
SECTION 22. Insurance Proceeds. The parties hereby irrevocably and
unconditionally agree that payment of Insurance Proceeds in respect of any
Aircraft shall be made in accordance with the applicable provisions of the
Notices to Insurer and Section 21 without the need for any further consent,
authorization, approval or direction of any party hereto (other than the
Security Trustee, who shall act upon the instructions of the Instructing Group).
Furthermore, for purposes of AVN67B (or any similar insurance endorsement then
in effect), each party hereto hereby instructs and authorizes each Lessee's and
any Operating Lessee's insurance brokers from time to time to rely exclusively
on this provision for the purpose of making all payments in accordance therewith
without the need for any further inquiry, consent, authorization, approval or
direction by or to said insurance brokers.
SECTION 23. No Waiver of Conditions; Further Assurances.
(a) The parties hereto hereby agree if any of the applicable conditions to
be satisfied on any Borrowing Date are not satisfied and the transactions
contemplated by this Agreement on such Borrowing Date in respect of the Aircraft
to be delivered on such Borrowing Date nevertheless take place, the party or
parties for whose benefit such condition is included shall not automatically be
deemed to have waived such condition (unless expressly waived) and the
applicable party or parties to which such condition relates shall procure the
satisfaction of such condition within such period as the party or parties for
whose benefit such condition is included shall reasonably specify (unless
expressly waived).
(b) Except as may be agreed in writing to the contrary by Ex-Im Bank
(whether a contemplated by Section 8B(b) or otherwise), each Borrower, Lessor
and Lessee and GFC shall from time to time, at the cost and expense of GFC, do
and perform such other and further acts and duly execute and deliver such
further documents and assurances as may be required by Applicable Laws or
requested by the Instructing Group to establish, maintain and protect the
respective rights and remedies of such Secured Party and to carry out and effect
the intent and purpose of this Agreement and the other Operative Documents.
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SECTION 24. Assignments and Transfers by Lenders; Agency.
(a) If any Lender (the "TRANSFEROR") transfers or assigns or wishes to
transfer or assign all or any of its rights and obligations under the Loan
Agreement, the Notes (as applicable) and the other Operative Documents to which
it is a party (other than an assignment or transfer to Ex-Im Bank pursuant to
the Ex-Im Bank Guarantee), then the Transferor shall procure that the assignee
or transferee under the Loan Agreement (the "TRANSFEREE") contemporaneously with
the date on which such transfer or assignment takes effect (the "EFFECTIVE
DATE") becomes a party to this Agreement and all parties hereto agree that the
Transferee may become a party to this Agreement on the Effective Date by
execution of an Accession Certificate.
(b) The provisions of Section 12 of the Loan Agreement are deemed to be
incorporated into this Agreement and shall apply as if the same were set out and
repeated in full in this Agreement and shall be incorporated and form part of
this Agreement.
(c) No Lender may assign or transfer any of its rights or obligations
hereunder or contemplated by this Section 24 and such assignment or transfer
shall not be effective, unless contemporaneously therewith such Lender assigns
or transfers to the same assignee or transferee all or a corresponding part of
its rights and obligations under the Loan Agreement, the Notes (as applicable)
and under each of the other Operative Documents to which such Lender is a party
in accordance with the terms thereof.
SECTION 25. Suspension and Cancellation by Ex-Im Bank. If a Lease Event of
Default or Loan Event of Default shall occur and be continuing, then Ex-Im Bank
may, by written notice to the Facility Agent, GFC, and each Borrower Party: (i)
suspend further Utilizations under the Ex-Im Bank Guarantee until Ex-Im Bank is
satisfied that the cause of such suspension has been removed; and/or (ii) cancel
the unutilized and uncancelled amount of the Ex-Im Bank Commitment. In the event
of a cancellation of all or part of the Ex-Im Bank Commitment by Ex-Im Bank, (a)
GFC shall pay to Ex-Im Bank on demand all fees, expenses and other amounts
(including, but not limited to, any Transaction Costs), owing to or for the
benefit of Ex-Im Bank under this Agreement, any other Operative Document, or any
other agreement relating thereto between Ex-Im Bank and GFC, and (b) all or a
corresponding portion, as the case may be, of each Lender's Commitment shall
ipso facto be cancelled for the purposes of this Agreement, the Loan Agreement
and each of the other Operative Documents.
SECTION 26. Reimbursement Obligations: Transfer.
(a) Reimbursement Obligations. In consideration of Ex-Im Bank's entering
into the Ex-Im Bank Guarantee, each Lessee hereby irrevocably and
unconditionally undertakes and agrees with Ex-Im Bank (to the extent the same
has not been paid by another Lessee), jointly and severally (i) to reimburse
Ex-Im Bank immediately upon demand for all amounts paid by Ex-Im Bank under and
in accordance with the Ex-Im Bank Guarantee (it being agreed that if Ex-Im Bank
shall issue a Payment Certificate the reimbursement obligation set forth in this
clause (i) shall include the aggregate face amount of all such Payment
Certificates so issued) or in the exercise of any right in respect thereof
provided by Applicable Law, (ii) to pay to Ex-Im Bank after Ex-Im Bank's
issuance of a Payment Certificate, for Ex-Im Bank's own account, the Ex-Im Bank
Make-Whole Amount, if any, calculated by Ex-Im Bank as of the Calculation
Date(as
70
such term is defined in the definition of Ex-Im Bank Make-Whole Amount) and
(iii) (without duplication of the foregoing) to indemnify Ex-Im Bank on a full
indemnity basis against all actions, proceedings, claims, demands, costs,
charges, damages, losses, costs and expenses (including, without limitation,
consequential damages) made, suffered or incurred by Ex-Im Bank and to pay to
Ex-Im Bank immediately upon demand for all payments, costs, damages, losses or
expenses of any description whatsoever which may be incurred by Ex-Im Bank in
connection with any investigative, administrative or judicial proceeding in
relation to or arising out of the Ex-Im Bank Guarantee.
(b) Transfer. Each Lessee acknowledges that upon payment of any amounts by
Ex-Im Bank under the Ex-Im Bank Guarantee, Ex-Im Bank shall be subrogated (by
way of an assignment) to all of the rights of the Facility Agent and the Lenders
to the extent set forth in the Ex-Im Bank Guarantee in accordance with the terms
thereof. Each Lessee and Lessor hereby consents and agrees that Ex-Im Bank is an
acceptable transferee for all or any portion of the Loans and/or the Notes for
all purposes of the Loan Agreement and the other Operative Documents and upon
any such assignment, Ex-Im Bank shall be deemed the Lenders to the extent set
forth in the Ex-Im Bank Guarantee under the Loan Agreement and the other
Operative Documents for all purposes thereof and each Lessee hereby agrees to
take such reasonable steps as are necessary to comply with any relevant
provision of any Operative Document to which such Lessee is a party, as a result
of such assignment.
(c) Waiver by Lessee. Each Lessee acknowledges and agrees that if any
covenant, stipulation or other provision of this Agreement which is expressed to
impose on such Lessee the obligation to make any payment whether by way of
indemnity or otherwise, is at any time void under any provision of Applicable
Law (including, without limitation, any law of any Relevant Jurisdiction
referable to such Lessee), such Lessee will not make any claim, counterclaim or
institute any proceedings against Ex-Im Bank or any of its assignees or
subrogees for any amount paid by such Lessee at any time and such Lessee waives
unconditionally and absolutely any rights and defenses, legal or equitable,
which arise under or in connection with any such provision and which might
otherwise be available to it for recovery of any amount due under such Lease or
any other Operative Document.
(d) Payments Absolute. The reimbursement and indemnity obligations of each
Lessee under this Agreement shall be absolute, unconditional and irrevocable,
and shall to the fullest extent provided by Applicable Law be paid strictly in
accordance with the terms of this Agreement, under all circumstances whatsoever,
including the following circumstances: (i) any lack of legality, validity,
regularity or enforceability of this Agreement or any of the Operative Documents
or any Operating Lease; (ii) any amendment or waiver of or any consent given
hereunder or under any of the Operative Documents or any Operating Lease; (iii)
the existence of any claim, set-off, defense or other rights which such Lessee
may have at any time against Ex-Im Bank or any other Person or entity, whether
in connection with this Agreement, the Operative Documents, any Operating Lease
or any unrelated transaction; and (iv) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing which could be
interpreted as a legal or equitable defense to payment hereunder or under any
Operative Document.
(e) Payments under Ex-Im Bank Guarantee. If Ex-Im Bank shall have made any
payment under the Ex-Im Bank Guarantee, and no Lessee and/or no Guarantor shall
have
71
reimbursed Ex-Im Bank in full on the same Business Day of the date of demand
under Section 26(a), Ex-Im Bank may thereafter exercise any of the rights and
remedies granted to it for exercise after a Lease Event of Default under the
applicable Leases in accordance with the terms of the Operative Documents and/or
Applicable Law.
(f) Payments to Ex-Im Bank. All payments to be made to Ex-Im Bank under
this Agreement or any Operative Document shall be in Dollars in immediately
available and freely transferrable funds. All payments to Ex-Im Bank shall be
made at the Federal Reserve Bank in the Federal Reserve District of New York for
credit to Ex-Im Bank's account with the Treasurer of the United States,
Washington, D.C., U.S.A., in accordance with the payment instructions set forth
in Section 33(j)(iii) hereof. Whenever any payment to Ex-Im Bank under this
Agreement or any other Operative Document shall be stated to be due and payable
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day with interest at the rate provided in Section 3.2(b) of
the Loan Agreement.
SECTION 27. Restructuring. The parties hereto agree that, upon the
occurrence and during the continuance of a Loan Event of Default that is not a
Lease Event of Default under any Lease, each will, at the cost and expense of
each Lessee, negotiate in good faith with the view to taking action and
restructuring the transactions contemplated by the Operative Documents in order
to effectively cure such Loan Event of Default under the Loan Agreement or to so
restructure such transactions so as to effectively provide to the parties hereto
the benefits intended to be provided to them in respect of such transactions,
and each will not, so long as there is no material risk of the sale, forfeiture,
loss or other prejudice to any Aircraft or any interest therein or any other
Collateral, proceed to exercise any remedies under the Loan Agreement for a
period of ten (10) Business Days after the occurrence of such Loan Event of
Default; provided that any such restructuring or standstill (i) shall be without
prejudice to the obligations of the Guarantors and each Borrower, Lessor and
Lessee under the Operative Documents, (ii) shall terminate upon the occurrence
of any Lease Event of Default under the applicable Lease or Leases and (iii)
shall not, in relation to any person, involve the taking of any action adverse
to it or in relation to which it is not indemnified to its reasonable
satisfaction.
SECTION 28. Certain Prepayments. The parties hereto agree that any right
of any Borrower under the Loan Agreement to voluntarily prepay any of its Loans
thereunder may be exercised by and only by or at the direction of the Lessee of
the Aircraft in relation to such Loan.
SECTION 29. Consultation. Upon receipt by Ex-Im Bank of a request from GFC
or any Lessee to reregister any Aircraft under Section 8C(g), Ex-Im Bank agrees
to consult with the Facility Agent with respect to such request; provided that
Ex-Im Bank's failure to consult with the Facility Agent shall not affect Ex-Im
Bank's or such Lessee's rights and obligations hereunder or thereunder.
SECTION 30. Limitations of Liability.
(a) Except as provided in Section 30(b) and (c) below, notwithstanding any
other provision contained in this Agreement or any other Operative Document to
the contrary, any and all liability of each Borrower, Lessor, Lessee, Lessor
Parent or Initial Lessor Parent Trust Company for amounts payable or expressed
to be payable by any such Person for, in respect of,
72
or in connection with, its obligations, representations, warranties, covenants,
indemnities or other contractual assurances in this Agreement or any other
Operative Document to any of the Security Trustee, the Facility Agent, Ex-Im
Bank, the Lenders, any Borrower (or, in the case of each such Borrower, to any
other Borrower), any Lessor (or, in the case of each such Lessor, to any other
Lessor), any Lessee (or, in the case of each such Lessee, to any other Lessee)
or any Lessor Parent (or, in the case of each such Lessor Parent, to any other
Lessor Parent) (for the purposes of this Section 30 only, each a "RELEVANT
PARTY", and together the "RELEVANT PARTIES") and all such liability under herein
or therein, shall be limited to and only payable from:
(i) in the case of each such Borrower, Lessor and Lessee, the
recovery from such Person of all sums that are paid to or recovered by
such Person (or any person claiming through or on behalf of such Person)
pursuant to any provision of any Operative Document; and
(ii) in the case of each such Lessor Parent and (subject to the
terms of the Initial Declaration of Trust) the Initial Lessor Parent Trust
Company, the value from time to time of the Trust Fund (as defined in the
relevant Declaration of Trust) of the related Lessor Parent Trust and
available to be applied to such liability; and, except as provided in the
relevant Declaration of Trust, in no circumstances shall Lessor Parent
Trust Company be personally liable for any shortfall that may arise as a
result thereof; and
(iii) the realization of any proceeds from the enforcement of any
security granted by such Person to the Security Trustee under the Security
Documents (except to the extent that such Person is not entitled to retain
such sums as against any third party by virtue of any law, including as a
result of any judgment or order of any court or in any bankruptcy of such
third party) and any other property of such Person.
(b) Section 30(a) shall be of no application in respect of any Borrower,
Lessor or Lessee and each such Person shall be fully liable and each of the
Relevant Parties shall be at liberty to prove all their respective rights and
remedies against such Person and its assets for any loss, damage, cost or
expense (including without limitation legal fees and expenses) sustained or
incurred by such Relevant Party as a consequence of (i) the willful misconduct
or gross negligence of such Person or (ii) except in the case of the Initial
Lessor Parent Trust Company, a representation or warranty made by such Person in
any Operative Document being untrue, incorrect or misleading which would have an
adverse effect upon the ability of such Person to perform or comply with its
obligations under this Agreement or any of the Operative Documents or (iii)
fraud on the part of such Person.
(c) The provisions of this Section 30 shall only limit the personal
liability of each Lessor for the discharge of its monetary obligations under
this Agreement or any of the Operative Documents and shall not (i) limit or
restrict in any way the accrual of interest on any unpaid amount, or (ii)
derogate from or otherwise limit the right of recovery, realization or
application by the Relevant Party under or pursuant to any of the Security
Documents or anything assigned, mortgaged, charged, pledged or secured under or
pursuant to any of the Aircraft Security Documents or (iii) limit or restrict in
any way the determination of the Obligations under the GATX Guarantee.
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SECTION 31. Guarantee of Designated Persons.
(a) Guarantee. Each Borrower, Lessor and each Lessee hereby guarantees to
each of the Secured Parties and their respective successors and assigns the
prompt payment in full when due (whether at stated maturity, by acceleration, by
optional prepayment or otherwise) of (i) in the case of each Borrower and
Lessor, the principal of and interest on the Loans made by the Lenders to any
other Borrower or Lessor, and all other amounts from time to time owing to the
Lenders or the Secured Parties by any other Borrower or Lessor under this
Agreement, the Loan Agreement or any other Operative Document, in each case
strictly in accordance with the terms thereof, and (ii) in the case of each
Lessee, all Initial Rent, Basic Rent, Supplemental Rent, Termination Value and
any other amounts payable by any other Lessee under this Agreement, any Lease or
any other Operative Document (for the purposes of this Section 31 only, such
obligations being herein collectively called the "CROSS GUARANTEED
OBLIGATIONS"). Each Borrower, Lessor and Lessee (for the purposes of this
Section 31 only, each a "CROSS GUARANTOR" and collectively, the "CROSS
GUARANTORS") hereby further agrees that if any other Borrower, Lessor or Lessee
(for the purposes of this Section 31 only, each a "CROSS GUARANTEED PERSON"), as
the case may be, shall fail to pay in full when due (whether at stated maturity,
by acceleration, by optional prepayment or otherwise) any of the Cross
Guaranteed Obligations, the related Cross Guarantor, as the case may be, will
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Cross
Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, by acceleration or otherwise) in accordance with the terms
of such extension or renewal.
(b) Obligations Unconditional.
(i) The obligations of each Cross Guarantor hereunder are
unconditional irrespective of (A) the value, genuineness, validity,
regularity or enforceability of any of the Cross Guaranteed Obligations,
(B) any modification, amendment or variation in or addition to the terms
of any of the Cross Guaranteed Obligations or any covenants in respect
thereof or any security therefor, (C) any extension of time for
performance or waiver of performance of any covenant of any Cross
Guaranteed Person or any failure or omission to enforce any right with
regard to any of the Cross Guaranteed Obligations, (D) any exchange,
surrender release of any other guaranty of or security for any of the
Cross Guaranteed Obligations, or (E) any other circumstance with regard to
any of the Cross Guaranteed Obligations which may or might in any manner
constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent hereof that the obligations of each Cross
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
(ii) Each Cross Guarantor hereby expressly waives diligence,
presentment, demand, protest, and all notices whatsoever with regard to
any of the Cross Guaranteed Obligations and any requirement that the
Security Trustee or any other Secured Party exhaust any right, power or
remedy or proceed against any Cross Guaranteed Person hereunder or under
the Designation Letter of such Cross Guaranteed Person or any Note or
Lease of such Cross Guaranteed Person or any other guarantor of or any
security for any of the Cross Guaranteed Obligations.
74
(c) Reinstatement. The guarantee in this Section 31 shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Cross Guaranteed Person in respect of the Cross Guaranteed Obligations is
rescinded or must be otherwise restored by any holder(s) of any of the Cross
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.
(d) Subrogation. Until the payment in full of the Secured Obligations and
all other amounts payable to the Secured Parties under the Operative Documents,
each Cross Guarantor hereby irrevocably waives all rights of subrogation or
contribution, whether arising by operation of law (including, without
limitation, any such right arising under the Bankruptcy Code) or otherwise, by
reason of any payment by it pursuant to the provisions of this Section 31.
(e) Remedies. Each Cross Guarantor agrees that, as between such Cross
Guarantor on the one hand and the Secured Parties on the other hand, the
obligations of any Cross Guaranteed Person guaranteed under this Agreement may
be declared to be forthwith due and payable, or may be deemed automatically to
have been accelerated, as provided in the Loan Agreement or any Lease, for
purposes of Section 10(a) hereof notwithstanding any stay, injunction or other
prohibition (whether in a bankruptcy proceeding affecting such Cross Guaranteed
Person or otherwise) preventing such declaration as against such Cross
Guaranteed Person and that, in the event of such declaration or automatic
acceleration such obligations (whether or not due and payable by such Cross
Guaranteed Person) shall forthwith become due and payable by the relevant Cross
Guarantor for purposes of said Section 31(a).
(f) Continuing Guarantee. The guarantee in this Section 31 is a continuing
guarantee and shall apply to all Cross Guaranteed Obligations whenever arising.
SECTION 32. Subordination. GFC covenants with the Security Trustee for the
benefit of the Secured Parties and agrees and declares as follows:
(a) The Subordinated Liabilities of each Lessee and the Secured
Subordinated Obligations of each Lessor are subordinated in right of repayment
to the prior payment in full of all Senior Liabilities to the extent and in the
manner provided in this Section 32.
(b) The priorities referred to in paragraph (a) will not be affected by
any reduction or increase in Basic Rent or by any intermediate reduction or
increase in, amendment or variation to, or satisfaction of, any of the Senior
Liabilities.
(c) So long as any part of the Senior Liabilities remains unpaid or
undischarged:
(i) after the occurrence of a Lease Event of Default and for as long
thereafter as the same is continuing, no Lessee may, without the prior
written consent of the Instructing Group, make any prepayment or payment
(whether in cash, by way of dividend, transfer of shares or other assets
or otherwise) on account of the Subordinated Liabilities (whether by way
of cash, loan or otherwise) nor shall any Lessee, GFC or any Lessee Parent
be entitled to demand or receive any such payment;
(ii) no Lessee may, without the prior written consent of the
Instructing Group, grant any security in respect of the Subordinated
Liabilities (excluding any such security
75
granted pursuant to the Operative Documents) nor shall any Lessee, GFC or
any Lessee Parent be entitled to demand or receive any such security or
commence or join any proceedings against any Lessee (in the case of GFC or
any Lessee Parent) or any Lessor (in the case of any Lessee) or take any
legal action in respect of the Subordinated Liabilities, the Secured
Subordinated Obligations or any part thereof or (in the case of GFC)
exercise any right or remedy in respect of any Inter-company Loan or (in
the case of any Lessee) in respect of the Secured Subordinated Obligations
(including, without limitation, the exercise of any right of set-off,
counterclaim or lien or any action or step with a view to winding-up of
any Lessee or Lessor, as the case may be).
(d) In the event of payment (whether in cash, by way of transfer of shares
or other assets or otherwise) being made to, or security being held by, GFC, any
Lessee Parent or any Lessee in breach of paragraph (c) immediately above, GFC,
such Lessee Parent or such Lessee, as the case may be, will pay or transfer to
the Security Trustee on behalf of the Secured Parties any sums or other assets
which shall have been received by it from any Lessee or Lessor, as the case may
be, in consequence of such breach (whereupon the underlying Subordinated
Liabilities or Secured Subordinated Obligations, as the case may be, equivalent
to the payment made shall be deemed not to have been reduced) and until such
payment or transfer GFC, such Lessee Parent or such Lessee, as the case may be,
will hold such sums or other assets or such security (as the case may be) in
trust for the benefit of the Secured Parties.
(e) On a winding-up of any Lessee or Lessor or other analogous event, the
claims of GFC and Lessee Parent in respect of the Subordinated Liabilities and
the claims of the Secured Subordinated Parties in respect of the Secured
Subordinated Obligations shall each be postponed to the Senior Liabilities and
no amount shall be payable to GFC or such Lessee Parent in respect of the
Subordinated Liabilities nor any distribution of assets of any kind or character
made to GFC, any Lessee Parent or any Lessee in respect thereof (whether in
cash, property, securities or otherwise) until the Senior Liabilities have first
been paid or discharged in full in accordance with their terms (and for this
purpose any payments received by the Secured Parties shall only be taken to
discharge the same to the extent of the actual amount received). If GFC, any
Lessee Parent or any Lessee proves in the winding-up (or other analogous event)
of any Lessee or Lessor for all or any part of the Subordinated Liabilities or
the Secured Subordinated Obligations, then it shall act in accordance with the
directions of the Security Trustee and any payment or distribution of assets of
such Lessee or Lessor of any kind or character to which GFC, such Lessee Parent
or such Lessee would have been entitled except for the provisions of this
Section shall be paid by the liquidator of such Lessee or such Lessor or other
person making such payment or distribution to the Security Trustee on behalf of
the Secured Parties to the extent necessary to repay all the Senior Liabilities
in full in accordance with their terms; provided, that, if any such payment or
distribution is notwithstanding the foregoing made to GFC, such Lessee Parent or
such Lessee, such Person shall hold any such payment or distribution on trust
for the Secured Parties for application in accordance with Section 21 and
Appendix AF.
(f) Other than as contemplated in or permitted under the Operative
Documents, neither GFC nor any Lessee Parent or Lessee shall not knowingly take
or omit to take any action whereby the subordination of the Subordinated
Liabilities or the Secured Subordinated Obligations (or any part thereof) as
contemplated in this Section to the Senior Liabilities might be terminated,
impaired or adversely affected.
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SECTION 33. Miscellaneous.
(a) This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
(b) No failure on the part of any party to exercise, and no delay in
exercising, any right, power or privilege under this Agreement or any other
Operative Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
(c) For the purposes of this Agreement and each other Operative Document
(other than the Ex-Im Bank Guarantee), all notices and other communications
(including any modifications of, or waivers or consents under, this Agreement or
such other Operative Document) shall be in writing, in English, and shall be
given or made by fax, mail or personal delivery and faxed, mailed or delivered
to the intended recipient at the address specified below; or; as to any party,
at such other address as shall be designated by such party in a notice to each
other party hereto. Except as otherwise provided in this Agreement or such
Operative Document, all such communications shall be deemed to have been duly
given when transmitted by fax (provided such transmission by fax is in legible
form and is accompanied by or generates a substantially simultaneous
confirmation of transmission), or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid;
provided that any communication or document to be made or delivered to the
Facility Agent, the Security Trustee or Ex-Im Bank shall be effective only when
received by the Facility Agent, the Security Trustee or Ex-Im Bank and then only
if the same is expressly marked for the attention of the department or officer
identified below (or such other department or officer as such Person shall from
time to time specify for this purpose).
(i) If to any Lessor or Lessor Parent:
Walkers SPV Limited
Xxxxxx Xxxxx
Xxxx Xxxxxx
X.X. Xxx 000 XX
Xxxxxx Xxxx
Grand Cayman
Cayman Islands
Attention: The Directors
Telephone: x0 000-000-0000
Fax: x0 000-000-0000
With a copy to the Security Trustee and GFC
77
(ii) If to the Security Trustee:
Xxxxx Fargo Bank Northwest, N.A.
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Corporate Trust Services
Telephone: 000-000-0000
Fax: 000-000-0000
With a copy to GFC
(iii) If to the Facility Agent or the Initial Lender:
Barclays Bank PLC
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Trade and Export Finance
Fax: 000-000-0000
Telephone; 000-000-0000
With a copy to:
Attention: Director, Loan Transaction Management
Fax: 000-000-0000
Attention: Global Services Unit
Fax: 000-000-0000/7/8
And with a copy to GFC
(iv) If to Ex-Im Bank:
Export-Import Bank of the United States
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
X.X.X.
Attention: Vice-President - Transportation Division
Reference: Ex-Im Bank Xxxxxxxxx Xx. XX000000XX - Xxxxxx Xxxxxx
-GATX
Telephone: 000-000-0000
Fax: 000-000-0000
With a copy to GFC
82
(v) If to GFC or any Lessee:
GATX Capital Division
GATX Financial Corporation
Four Embarcadero Centre, Suite 2200
San Francisco, California 94111
U.S.A.
(d) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, UNITED STATES OF
AMERICA, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW. Any suit, action or
proceeding against any of the parties hereto with respect to the Operative
Documents or any judgment entered by any court in respect thereof may be brought
in the Supreme Court of the State of New York, County of New York and/or the
United States District Court for the Southern District of New York, and each
party hereto submits to the non-exclusive jurisdiction of such courts for the
purpose of any such suit, action or proceeding; provided, however, that
notwithstanding the foregoing, any party may commence an action in any other
jurisdiction to otherwise enforce a judgment issued by such courts. Each
Borrower, Lessor and Lessee hereby agrees that service of all writs, process and
summonses in any such suit, action or proceeding brought in such courts may be
made upon its relevant Process Agent, and it hereby irrevocably appoints each of
its Process Agent as its true and lawful attorney-in-fact in its name, place and
stead (as well as that of its respective successors and assigns) to accept such
service of any and all such writs, process and summonses, and agrees that the
failure of its relevant Process Agent to give any notice of any such service of
process to it shall not impair or affect the validity of such service or of any
judgment based thereon. Each of Borrower, Lessor and Lessee further agrees (to
the extent permitted by Applicable Laws) that a final judgment against it in any
such action or proceeding may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law, a certified or true copy of
which final judgment shall be conclusive evidence of the fact and of the amount
of any indebtedness or liability of it, as the case may be, therein described;
provided that nothing in this Section 30(d) shall affect the right of any party
hereto or its successors, subrogees or assigns to serve legal process in any
other manner permitted by law or affect the right of such party or its
successors, subrogees or assigns to bring any action or proceeding against any
Borrower, Lessor or Lessee or their respective property in the courts of other
jurisdictions. Each of Borrower, Lessor and Lessee agrees that (x) the sole
responsibilities of their respective Process Agents shall be (i) to receive such
process, (ii) to send a copy of any such process so received to it, as the case
may be, by registered airmail, return receipt requested, at its address set
forth in Section 30(c), or at the last address filed in writing by it with the
relevant Process Agent, and (iii) to give prompt facsimile notice of receipt
thereof to each of it at such address and (y) each Process Agent shall have no
responsibility for the receipt or nonreceipt by each of it of such process. Each
of Borrower, Lessor and Lessee hereby agrees to pay to its Process Agents such
compensation as shall be agreed upon from time to time by it and its Process
Agents for the Process Agents' services hereunder. Each Borrower, Lessor and
Lessee hereby agrees that its respective submission to jurisdiction and its
designation of its Process Agents is made for the express benefit of the Lender,
the Facility Agent, the Security Trustee, Ex-Im Bank and their respective
successors, subrogees, and assigns. Each of Borrower, Lessor and Lessee agrees
that
83
it will at all times continuously maintain a process agent to receive service of
process in the City, County and State of New York on behalf of itself and its
properties with respect to this Agreement and shall give each party hereto
written notice prior to any change of address for such agent, and in the event
that, for any reason, the process agent named pursuant to this Section 30(d)
shall no longer serve as process agent to receive service of process on it shall
promptly appoint a successor Process Agent. In the event of the transfer of all
or substantially all the assets and business of a Process Agent to any other
corporation or Person, by consolidation, merger, sale of assets or otherwise,
such other corporation shall be substituted hereunder for such Process Agent
with the same effect as if named herein in place of such Process Agent. Each
party hereby irrevocably further consents to the service of process in any suit,
action or proceeding in said courts by the mailing thereof by any party hereto
by registered or certified mail, postage prepaid, to such party at its address
specified in Section 30(c). Each party hereto hereby irrevocably waives any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to the Operative Documents
brought in any of the aforesaid courts and hereby further irrevocably waives any
claim that any such suit, action or proceeding has been brought in an
inconvenient forum.
(e) The payment obligations of any party to an Operative Document (the
"PAYOR") expressed to be payable thereunder in one currency (the "FIRST
CURRENCY") shall not be discharged by an amount paid in another currency,
whether pursuant to a judgment or otherwise, to the extent that the amount so
paid on prompt conversion to the first currency under normal banking procedures
would not yield the full amount of the first currency due thereunder, and the
payor shall indemnify the recipient of such payment (the "PAYEE") against any
such shortfall; and in the event that any payment by the payor, whether pursuant
to a judgment or otherwise, upon conversion and transfer does not result in
payment of such amount of the first currency, the payee shall have a separate
cause of action against the payor for the additional amount necessary to yield
the amount due and owing to the payee.
(f) The Section and paragraph headings in this Agreement and the table of
contents are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof.
(g) Notwithstanding any other provision of any other Operative Document
(other than the Ex-Im Bank Guarantee and the Borrower Indemnity Agreement), no
provision of this Agreement or any other Operative Document, may be amended,
modified, waived, discharged, terminated or otherwise changed except by an
instrument in writing signed (i) in the case of any amendment or modification,
by both the party against whom enforcement of such amendment or modification is
sought and the Security Trustee, (ii) the parties to the relevant Operative
Document and (iii) in any other case, by the Security Trustee; provided that the
Security Trustee shall not sign any such amendment, modification, waiver,
discharge, termination or other change except in accordance with Section 13. The
Security Trustee shall promptly notify each party hereto of any such amendment,
modification, waiver, discharge, termination or other change which it has signed
or has agreed to sign, it being understood that its failure to give such notice
shall not affect the effectiveness of any such action or result in any liability
to the Security Trustee.
84
(h) Any provision of this Agreement or any other Operative Document that
is prohibited or unenforceable in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction, and shall not
invalidate or render unenforceable the other provisions hereof in any
jurisdiction. To the extent permitted by Applicable Law, the parties hereto
waive any provision of law which renders any provision hereof or thereof
prohibited or unenforceable in any respect.
(i) Each party hereto (other than Ex-Im Bank) acknowledges and agrees that
the activities contemplated by the provisions of the Operative Documents are
commercial in nature rather than governmental or public and therefore
acknowledges and agrees that it is not entitled to any right of immunity on the
grounds of sovereignty or otherwise with respect to such activities or in any
legal action or proceeding arising out of or relating to the Operative
Documents. Each such party in respect of itself and its properties and revenues,
expressly and irrevocably waives any such right of immunity (including, but not
limited to, any immunity from suit, from the jurisdiction of any court, from
service of process, from set-off, from any execution, or attachment in aid of
execution prior to judgment or otherwise or from any other legal process) or
claim thereto which may now or hereafter exist (whether or not claimed) and
irrevocably agrees not to assert any such right or claim in any such action or
proceeding that may at any time be commenced, whether in the United States of
America or otherwise.
(j) Unless otherwise specified by a Secured Party in a notice delivered to
each of Lessee, Ex-Im Bank and the Facility Agent, any amounts payable to any
Secured Party under this Agreement or any other Operative Document shall be paid
as follows:
(i) Facility Agent and Initial Lender. All such amounts payable to
the Facility Agent or to the Initial Lender shall be paid to the Facility
Agent for its own account, or on behalf of the Initial Lender, as the case
may be, at the following account:
Barclays Bank PLC
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXX
Account Name: CLAD control account
ABA#: 026 002 574
Account #: 050 019104
Ref.: GATX - Ex-Im Bank Facility
(ii) Security Trustee. All such amounts payable to the Security
Trustee shall be paid to the Security Trustee, for its own account or in
its capacity as Security Trustee, as the case may be, at the following
account:
Xxxxx Fargo Bank Northwest, X.X.
Xxxxx Fargo Bank
ABA # 000-000-000
Account # 051-0000000
Account Name: Corporate Trust Services
Ref: EXIM/GATX/38342
85
(iii) Ex-Im Bank. Notwithstanding anything to the contrary contained
in any Operative Document, all such amounts payable to Ex-Im Bank shall be
paid at the Federal Reserve Bank of New York, for credit to the account
identified below, or as otherwise directed in writing to any Lessor Party,
Lessee Party, any Guarantor and the Facility Agent by the Chief Financial
Officer, Treasurer-Controller, or Deputy Treasurer-Controller of Ex-Im
Bank:
U.S. TREASURY DEPARTMENT
0000-0000-0
TREAS NYC/CTR/
BNF=/AC-4984 OBI=
EXPORT-IMPORT BANK
DUE_____________________,_______ON
EIB GUARANTEE NO. AP077971XX - United States - GATX
FROM:___________________________
(k) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, permitted assigns and
transferees; provided, that no Lessee, Lessor or Lessor Parent may assign any of
their rights or delegate any duty under this Agreement to any Person (except as
expressly permitted by the Operative Documents).
(l) Without prejudice to any Security Document, any provision of any
Lease, any Sublease or any Operating Lease which is expressed to be for the
benefit of Ex-Im Bank or any other Person or which otherwise confers rights on
Ex-Im Bank or any other Person is hereby restated by each Lessor, Lessee and
Sublessee (as the case may be) to and for the benefit of Ex-Im Bank and such
other Person as if, mutatis mutandis, set out in full herein.
* * *
86
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed as of the day and year first above written.
INITIAL LESSOR PARTY AND INITIAL
BORROWER PARTY
USEB AIRCRAFT LIMITED
Executed as a Deed
By USEB AIRCRAFT LIMITED
In the presence of:
/s/ XXXX XXXXXXXX By: /s/ XXXXXXXX XXXXX
---------------------------- ---------------------------------
Witness XXXX XXXXXXXX Name: XXXXXXXX XXXXX
LEGAL SECRETARY Title: Attorney in fact
000 XXXXXXXXXX XXXXXX
Executed as a Deed INITIAL LESSEE PARTIES
By XXXXX LEASING LIMITED
In the presence of: XXXXX LEASING LIMITED
/s/ [ILLEGIBLE] By: /s/ Xxxxxxx Xxxxxxx
------------------------------- ---------------------------------
Witness Name: Xxxxxxx Xxxxxxx
Title: Assistant Secretary
Executed as a Deed XXXXXXX LEASING LIMITED
By XXXXXXX LEASING LIMITED
In the presence of: By: /s/ Xxxxxxx Xxxxxxx
---------------------------------
/s/ [ILLEGIBLE] Name: Xxxxxxx Xxxxxxx
------------------------------ Title: Assistant Secretary
Witness
XXXXXXX LEASING CORPORATION
By: /s/Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Secretary
XXXXXXX LEASING (TRELAND)
LIMITED
By: /s/Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Secretary
SECURITY TRUSTEE
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its
individual capacity, except as expressly
provided herein, but solely as Security
Trustee
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: XXXXXXX X. XXXXXX
Title: ASSISTANT VICE PRESIDENT
EX-IM BANK
EXPORT-IMPORT BANK OF THE
UNITED STATES
BY: /s/ XXXXXX X. XXXXX
---------------------------------
NAME: XXXXXX X. XXXXX
TITLE: VICE PRESIDENT
GUARANTOR
GATX FINANCIAL CORPORATION
By: /s/ XXXXX X. XXXX
-----------------------------------
Name: XXXXX X. XXXX
Title: VICE PRESIDENT
XXXXXXX LEASING (CYPRUS)
LIMITED
By: /s/ XXXXXXX XXXXXXX
----------------------------------
Name: XXXXXXX XXXXXXX
Title: ATTORNEY IN FACT
INITIAL LESSOR PARENT
XXXXXX SPV LIMITED, NOT in its
individual capacity except as expressly
set forth herein, but solely acting in
its capacity as trustee of the USEB
Aircraft Trust
By: /s/ XXXXXXXX XXXXX
----------------------------------
Name: XXXXXXXX XXXXX
Title: ATTORNEY IN FACT
FACILITY AGENT
BARCLAYS BANK PLC
By: /s/ XXXXX XXXXX
-----------------------------------
Name: XXXXX XXXXX
Title: DIRECTOR
INITIAL LENDER
BARCLAYS BANK PLC
By: /s/ XXXXX XXXXX
-----------------------------------
Name: XXXXX XXXXX
Title: DIRECTOR
SCHEDULE 1
THE AIRCRAFT
ACTUAL
DELIVERY DATE/
SCHEDULED
DELIVERY
THE AIRCRAFT MONTH
1. New Boeing 737-800 aircraft with Brazilian registration January 14,
xxxx PR-GOJ and the manufacturer's serial number of 2002
32359, together with two CFM Model CFM56-7B24 engines
bearing manufacturer's serial numbers 889751 and
888760(1)
2. New Boeing 737-800 aircraft with Brazilian registration February 6,
xxxx PR-GOK and the manufacturer's serial number of 2002
32360, together with two CFM Model CFM56-7B24 engines
bearing manufacturer's serial numbers 888849 and
888850(2)
3. New Boeing 737-800 aircraft with Turkish registration March 29, 2002
xxxx TC-lEA and the manufacturer's serial number of
32361, together with two CFM Model CFM56-7B27 engines
bearing manufacturer's serial numbers 888- 878 and
888-880(3)
4. New Boeing 737-800 aircraft with Czech registration xxxx Xxx, 2002
OK-TVB and the manufacturer's serial number of 32362,
together with two CFM Model CFM56-7B27 engines bearing
manufacturer's serial numbers 888930 and 888932
5. New Boeing 737-800 aircraft with [ ]* registration xxxx Xxx, 2002
[ ]* and the manufacturer's serial number of 32363,
together with two CFM Model CFM56-7B27 engines bearing
manufacturer's serial numbers [ ]* and [ ]*
6. New Boeing 737-800 aircraft with [ ]* registration xxxx June, 2002
[ ]* and the manufacturer's serial number of 32364,
together with two CFM Model CFM56-7B27 engines bearing
manufacturer's serial numbers [ ]* and [ ]*
7. New Boeing 737-800 aircraft with [ ]* registration xxxx October, 2002
[ ]* and the manufacturer's serial number of 32365,
together with two CFM Model CFM56-7B27 engines bearing
manufacturer's serial numbers [ ]* and [ ]*
----------
(1) Delivered Aircraft
(2) Delivered Aircraft
(3) Delivered Aircraft
8. New Boeing 737-800 aircraft with [ ]* registration xxxx November, 2002
[ ]* and the manufacturer's serial number of 32366,
together with two CFM Model CFM56-7B27 engines bearing
manufacturer's serial numbers [ ]* and [ ]*
9. New Boeing 737-800 aircraft with [ ]* registration xxxx December, 2002
[ ]* and the manufacturer's serial number of 32367,
together with two CFM Model CFM56-7B27 engines bearing
manufacturer's serial numbers [ ]* and [ ]*
10. New Boeing 737-800 aircraft with [ ]* registration xxxx March, 2003
[ ]* and the manufacturer's serial number of 32368,
together with two CFM Model CFM56-7B27 engines bearing
manufacturer's serial numbers [ ]* and [ ]*
* To be identified in the Notice of Borrowing applicable to such Aircraft.
S-1-2
SCHEDULE 2
MINIMUM LEASE PROVISIONS
(Section 8C of the Participation Agreement)
"Minimum Lease Provisions", in relation to any Operating Lease, means the
following provisions:
(a) Rental
(i) Currency
All Rental shall be denominated and payable in Dollars.
(ii) Set-off and Counterclaim
The Operating Lease shall be a 'net' lease in accordance with
industry practice and the Operating Lessee's obligation to pay
rental and make other payments in accordance with the Lease
Agreement will be absolute and unconditional without any right of
set-off or counterclaim.
(b) Maintenance Reserves and Security Deposit
The Operating Lessee will be required to pay airframe and (unless and for
such time as the Operating Lessee is a party to an Engine Maintenance
Agreement) engine reserves (collectively the "Maintenance Reserves")
and/or any security deposit (the "Security Deposit") in circumstances
where such Maintenance Reserves and such Security Deposit (if any) as the
Operating Lessee deems appropriate in accordance with the Standard on such
terms as would be appropriate when acting in accordance with the Standard.
(c) Disclaimer
(i) The Operating Lessee shall, on delivery of the Aircraft to it,
expressly acknowledge to the Operating Lessor that (save as may be
permitted hereby) none of the Operating Lessee or any Secured Party
gives any warranties, representations or guarantees of any kind with
respect to the Aircraft.
If the Operating Lessee so requires or, if the Applicable Law limits
the extent to which such acknowledgement may be given, such
acknowledgement may be qualified so that it is given only to the
extent permitted by Applicable Law.
(ii) The Operating Lessee's obligation to accept delivery of the Aircraft
may be conditional on the Operating Lessor having satisfied itself
as to the condition thereof or as to compliance with any specific
criteria prior to the execution of its certificate of acceptance.
(iii) The Operating Lessor may warrant or undertake to the Operating
Lessee that the Aircraft will comply with certain specific factual
criteria, provided such warranty or undertaking is satisfied or
discharged by the Operating Lessee's acceptance of the Aircraft upon
the execution of the Acceptance Certificate (or, if the Operating
Lessee agrees to accept delivery notwithstanding non-compliance,
provided the Operating Lessor undertakes to rectify such
non-compliance (or provide appropriate compensation)).
(d) Operational and Other Undertakings
(i) The Operating Lease shall (1) contain provisions corresponding in
all material respects with those stated in Section 6 (Possession;
Use; Lawful Insured Operations; Maintenance; Insignia) and 13
(Liens) of the Model Form Operating Lease amended to the extent the
Operating Lessor considers appropriate acting in accordance with the
Standard (having due regard to the interests of the Secured Parties)
and amended to provide that the Aircraft must be kept and maintained
in such condition as may be necessary (A) to enable the
airworthiness certificate of the Aircraft to be maintained in good
standing at all times under the Applicable Laws of the State of
Registration and (B) to obtain an airworthiness certificate from the
applicable regulatory authorities of at least one of the United
States, the JAA, Japan and Australia) and (2) require that the
Operating Lessee obtain all necessary consents, approvals and
authorizations in connection with its leasing of the Aircraft
thereunder.
(ii) The Operating Lease shall require that the Operating Lessee shall
(1) operate the Aircraft in accordance with all applicable laws, (2)
obtain and maintain all licenses, consents and permits reasonably
necessary in connection with its operation of the Aircraft, (3)
discharge all Liens from the Aircraft other than Permitted Liens,
(4) during the Operating Lease Period, provide periodic reports on
the utilization and status of the Aircraft, Airframe and the Engines
in such form as may be agreed by the Operating Lessor in accordance
with the Standard and (5) permit inspection of the Aircraft by the
Instructing Group as contemplated under Section 8D(b) of the
Participation Agreement.
(e) Indemnities
The Operating Lease shall contain provisions corresponding in all material
respects with those stated in Section 12 of the Model Form Operating Lease
(Expenses and Indemnities) amended to the extent the Operating Lessor
considers appropriate acting in accordance with the Standard (having due
regard to the interests of the Secured Parties; provided, that, in the
case of a Quiet Enjoyment Operating Lease, such amendment shall not
materially adversely affect the Secured Parties as "Indemnitees"
thereunder).
(f) Insurance
Without limiting Section 10 of the Lease, the insurance obligations of the
Operating Lessee under the Operating Lease shall mutatis mutandis
correspond and comply in all
S-2-2
material respects with those stated in Clause 11 (Insurances) of the Model
Form Operating Lease, except that the Operating Lessor may agree
amendments to such provisions which are consistent with the Standard but
which:
(i) are required because the relevant provisions would otherwise contain
a requirement not available in the market; and
(ii) will not and are not likely adversely to prejudice the Secured
Parties.
(g) Representations and Warranties
The Operating Lessee shall represent and warrant to the Operating Lessor:
(i) concerning the Operating Lessee's corporate standing or legal
status;
(ii) that the Operating Lease has been duly authorised and executed by
the Operating Lessee; and
(iii) that the Operating Lease constitutes legal, valid, binding and
enforceable obligations of the Operating Lessee (if the Operating
Lessee so requires, this representation and warranty may (to the
extent appropriate in accordance with the Standard) be qualified by
reference to the qualifications in the legal opinion relating to the
Operating Lease).
(h) General Reporting
The Operating Lease shall require that the Operating Lessee provide the
following information:
(i) annual audited financial statements of the Operating Lessee or, if
the Operating Lessee's obligations are guaranteed by a more
creditworthy entity, the guarantor under such guarantee;
(ii) notice of any Event of Loss or "Total Loss" of the Aircraft,
Airframe or any Engine; and
(iii) notice of any other loss event with respect to the Aircraft,
Airframe or any Engine not amounting to a Event of Loss or "Total
Loss" if the estimated cost of repair exceeds an amount determined
in accordance with the Standard.
(i) Redelivery of the Aircraft
The redelivery obligations of the Operating Lessee shall be consistent
with those set out in Section 14 (Return of Aircraft) of the Model Form
Operating Lease (other than any amendments negotiated in accordance with
the Standard) and shall correspond and comply in all material respects
with the following provisions:
S-2-3
(i) Date of Redelivery
The Operating Lessee will be obliged to redeliver the Aircraft and
all Manuals and Technical Records to the Operating Lessee on the
expiration or earlier termination of the Lease Period ("Expiry").
(ii) Technical Reporting
At or prior to the Expiry, the Operating Lessee will provide the
Operating Lessor with all technical information reasonably requested
by the Operating Lessor regarding the Aircraft.
(iii) Redelivery Location
On the Expiry, the Aircraft shall be technically accepted by the
Operating Lessor at such airport as may be mutually agreed to by the
Operating Lessee and the Operating Lessor. At such time, the
Operating Lessee and the Operating Lessor shall execute a return
acceptance certificate.
(iv) Aircraft Inspection
The Operating Lease will oblige the Operating Lessee immediately
prior to the proposed redelivery of the Aircraft, to carry out for
the Operating Lessor and/or the Operating Lessor's representatives a
demonstration flight of the Aircraft for a period of not greater
than two (2) hours.
(v) Certificate of Airworthiness Matters
The Aircraft will possess a current certificate of airworthiness
issued by the Civil Aviation Authority.
(vi) General Condition of Aircraft at Redelivery
(A) The Aircraft shall be in the same working order, condition and
appearance as when received pursuant to the Operating Lease
(reasonable wear from normal airline flight operations
excepted), with all pilot discrepancies and deferred
maintenance items cleared, clean by international commercial
airline standards and ready for flight with all of the
Aircraft equipment, components and systems operating within
limits specified in the maintenance manual and functioning in
accordance with their intended use. The Aircraft shall be free
and clear of all Liens other than Permitted Liens.
(B) The Lease Agreement will oblige the Operating Lessee to
redeliver the Aircraft to the Operating Lessor with the same
equipment as at the commencement of the Operating Lease,
subject only to those replacements, additions and
modifications which may have been made and properly
S-2-4
documented pursuant to the Operating Lease or as otherwise
specifically approved in writing by the Operating Lessor.
(C) The Operating Lease will provide that, at redelivery, the
Operating Lessee will cany out all inspections and checks then
required on the Aircraft in accordance with the Maintenance
Programme, including the next sequential C-Check (as defined
in the Model Form Operating Lease). All such inspections and
checks must be carried out by an Authorized Maintenance
Performer. All discrepancies discovered during such
inspections and checks shall be rectified to the Operating
Lessor's satisfaction.
(vii) Export and Deregistration of Aircraft
The Operating Lease will provide that at the Operating Lessor's
request, the Operating Lessee will (i) assist in providing an export
certificate of airworthiness or its equivalent from the State of
Registration so that the Aircraft can be exported to the country
designated by the Operating Lessor, and (ii) assist with
de-registration of the Aircraft from the register of aircraft in the
State of Registration.
(j) Lease Event of Default
The Operating Lessor shall be expressly entitled by the Operating Lease to
terminate the leasing of the Aircraft by the Operating Lessee, and to
repossess the same, at any time after the expiration of the agreed grace
period or remedy period, if any, of the occurrence of certain events,
which will be broadly consistent with those set out in Section 15 (Events
of Default) of the Model Form Operating Lease, amended mutatis mutandis to
reflect the change in Operating Lessee, but in any event including in such
events, failure of the concerned Operating Lessee to pay amounts payable
by it thereunder or to affect Insurances in accordance with the
requirements of the relevant Operating Lease or the bankruptcy of such
Operating Lessee. The Operating Lessor may negotiate with the applicable
Operating Lessee additional exceptions and qualifications which are
consistent with the Standard.
(k) Assignment
No assignment, novation, transfer, mortgage or other charge may be made by
the Operating Lessee of any of its rights with respect to the Airframe,
any Engine or any Part or under the Operating Lease.
(l) Governing Law
The Operating Lessor shall attempt to procure that the governing law of
the Operating Lease shall be English law or New York law. However, the
governing law may be the law of another country if the legal opinion (of
counsel qualified in such-country) states that the Operating Lease
constitutes binding and enforceable obligations of the Operating Lessee
under such law (such opinion may be subject to qualifications acceptable
to the Operating Lessor, acting in accordance with the Standard).
S-2-5
(m) Additional Documents
Any ancillary documents or letter agreements entered into by the Operating
Lessor with the Operating Lessee shall not contain any provisions which
conflict with or qualify the provisions of these Minimum Lease Provisions.
(n) Aircraft Agreed Value
Without limiting Section 11 of the Lease, the amount payable by the
Operating Lessee to the Operating Lessor under the Operating Lease at any
time on the consequence of an Event of Loss or a "Total Loss" of the
Aircraft will not be less than the Aircraft Agreed Value with respect to
such Aircraft at such time.
(o) Subject and Subordinate Operating Lease
If the Operating Lease is not, or is not intended to be, a Quiet Enjoyment
Operating Lease, the leasing of the Aircraft pursuant thereto shall be
made expressly subject and subordinate to the interests, rights and
benefits of the Operating Lessor and the Security Trustee on behalf of the
Secured Parties under the Operative Documents and shall terminate if a
Lease Event of Default has occurred and is continuing.
S-2-6
SCHEDULE 3
OPERATIONAL UNDERTAKINGS
(Section 8D(a)(i)(A) of the Participation Agreement)
"Operational Undertakings" means the following:
(a) Possession
(i) The relevant Aircraft and the operations performed therewith shall,
subject to applicable laws, rules and regulations of the Civil
Aviation Authority, be under the exclusive control of the Lessee or
GFC or the duly authorized and qualified agents of the Lessee or
GFC.
(ii) The Lessee shall not without the prior written consent of the
Security Trustee (no such consent of the Security Trustee to be
unreasonably withheld or delayed), deliver, relinquish or transfer
possession of the relevant Aircraft, provided, however, that, so
long as no Lease Event of Default shall have occurred and be
continuing, the Lessee may, subject to (e) below):
(A) deliver possession to a Sublessee pursuant to a Sublease
permitted in accordance with Section 8C of the Participation
Agreement;
(B) transfer of possession and replacement of Parts as provided in
Section 8 of the Lease;
(C) deliver possession of the relevant Aircraft, any Engine or any
Part thereof to an Authorized Maintenance Performer for
service, repair, maintenance or overhaul work required by the
terms hereof, or for modifications, alterations or additions
permitted by the provisions of this Lease, or
(D) install an Engine on any other Airframe, or
(E) subject any Engine to normal interchange or pooling agreements
or arrangements customary in the airline industry which
pooling or interchange shall not constitute a waiver of any
right or remedies of any Secured Party,
provided that no agreement or arrangement described in (C), (D), (E) or (F)
above contemplates or requires the transfer of title to any Engine and any
Engine or Part so removed shall be subject to separate insurance coverage.
(b) Lessee's responsibility for certain costs
The Lessee shall:
(i) pay for and provide all electric power, oil, fuel and lubricant
consumed by and required for the operation of the Aircraft; and
(ii) promptly pay all navigation charges (including landing fees,
departure fees and airport taxes) the non-payment of which could
result in a Lien upon the Aircraft.
(c) Lawful insured operations
The Lessee will not cause or permit the Aircraft, to be maintained, used
or operated in violation of any law, treaty, statute, rule, regulation or order
of any Governmental Body having jurisdiction or contrary to the relevant
Manufacturer's operating manuals and instructions, or, in the case of the
Aircraft and the Engines, in violation of any airworthiness certificate or
registration relating thereto. The Lessee agrees not to operate the Aircraft or
allow the Aircraft to be operated:
(i) unless the Aircraft is covered by insurance as required by the
Insurance Undertakings or
(ii) contrary to the terms of the insurance required by the provisions of
Insurance Undertakings.
(d) Notice of maintenance
Regardless of the identity of the Authorized Maintenance Performer, the
Lessee shall notify the Security Trustee, as soon as reasonably practicable
prior to the scheduled commencement thereof, of each upcoming major structural
inspection (complete or partial), or other major check to be performed on the
relevant Airframe and of any Engine overhaul.
(e) Maintenance
The Lessee, at its own cost and expense, or by application of any
available Maintenance Reserves and/or Security Deposits, shall or shall procure
that the Authorized Maintenance Performer shall:
(i) service, repair, maintain, overhaul and test, or cause the same to
be done to, the Aircraft (A) so as to keep the Aircraft in the same
condition as when delivered to the Lessor or the Bridge Owner, as
the case may be pursuant to the Purchase Agreement or the Aircraft
Sale Agreement, as the case may be, ordinary wear and tear excepted,
and in good operating condition, and (B) so as to keep the Aircraft
in the condition necessary to enable the airworthiness certification
of the Aircraft to be maintained in good standing at all times under
all Applicable Laws and regulations of the Civil Aviation Authority
and to obtain an airworthiness certificate from the applicable
regulatory authorities of at least one of the United States, the
JAA, Japan and Australia;
(ii) maintain or procure the maintenance of all records, logs and other
materials (including, without limitation, all Manuals and Technical
Records) required by the Civil Aviation Authority or the FAA in
respect of the Aircraft;
(iii) prior to (and if not prior to, then promptly after) the commencement
of any Operating Lease, incorporate into the Aircraft all mandatory
Service Bulletins
S-3-2
issued by the relevant Manufacturer and which are required to be
performed on or before the date of such commencement;
(iv) cany out, on the Aircraft, each applicable AD which the Civil
Aviation Authority may from time to time issue on or by the date
upon which the same is required to be carried out;
(v) maintain all records and documents required by the Civil Aviation
Authority or the Maintenance Program;
(vi) maintain, service, repair and overhaul the relevant Airframe and the
related Engines to comply with all warranty requirements pursuant to
the Purchase Agreement or, as the case may be, any warranties in
relation to the relevant Engine provided by the Engine Manufacturer;
(vii) equip each Airframe at all times with two Engines (except as may be
required for maintenance); and
(viii) cause all maintenance and repairs to the Aircraft to be done by an
Authorized Maintenance Performer.
(f) Insignia and notices
In respect of each Aircraft for which it is the Lessee or Sublessee, each
Lessee Party shall:
(i) immediately prior to the commencement of the leasing under each
Operating Lease for such Aircraft, affix in the cockpit of the Aircraft
adjacent to and in an equally prominent position as the airworthiness
certificate therein, and on each Engine, a nameplate bearing the
inscription: 'This [Aircraft] [Engine] is owned by [*Lessor*], subject to
a mortgage in favor of Xxxxx Fargo Bank Northwest, N.A., leased to
[*Lessee*], [sub-leased to [*Sublessee*] and operated by [*Operating
Lessee*]", or such other inscription as the Instructing Group from time to
time may reasonably request in order to show the interests of the Secured
Parties in the Aircraft or Engine, as the case may be. Such Lessee will
not allow any person to place the name or other indication of any person
to be placed on the relevant Airframe or any Engine as a designation that
might be interpreted as a claim of ownership; and
S-3-3
(ii) at all times during any period such Aircraft is Off-Lease,
affix in the cockpit of the Aircraft adjacent to and in an equally
prominent position as the airworthiness certificate therein, and on each
Engine, a nameplate bearing the inscription: 'This [Aircraft] [Engine] is
owned by [*Lessor*], subject to a mortgage in favor of Xxxxx Fargo Bank
Northwest, N.A., leased to [*Lessee*]. and [sub-leased to [*Sublessee*]",
or such other inscription as the Security Trustee from time to time may
reasonably request in order to show the interests of the Secured Parties
in the Aircraft or Engine, as the case may be.
(g) Use of Aircraft
(i) (A) the Lessee shall use the relevant Aircraft solely in commercial
operations for which the Lessee is duly authorized, (B) the Lessee
shall not use, or permit the use of, the Aircraft for any purpose
for which it is not suitable, (C) nothing herein shall prohibit the
Lessee's reasonable use and demonstration of the Aircraft in
remarketing thereof and (D) the Lessee shall comply with all
regulations of the Civil Aviation Authority.
(ii) the Aircraft may not be (A) flown to or within an Excluded Country
or operated or used by or for any person which is a national of, or
established under, the laws of, or whose principal place of business
or principal place of aircraft operations is located in, an Excluded
Country, (B) principally used in. or operated or used by or for any
person which is a national of, or established under the laws of, or
whose principal place of business or principal place of aircraft
operations is located in, a Restricted Country, (C) "primarily
based" in one or more Restricted Countries and for the purposes of
this provision, "primarily based" shall mean that during any
consecutive seven (7) day period, the aggregate amount of time spent
on the ground by the Aircraft in one or more Restricted Countries
shall exceed fifteen per cent. (15%) of the total amount of time
spent on the ground during such seven (7) day period,provided that
the limitation imposed by this paragraph (C) shall not prohibit, to
the extent necessary, any non-recurring emergency maintenance or
other non-recurring emergency repairs to be done with respect to the
Aircraft in a Restricted Country, (D) operated or used in
contravention of the Eximbank Statutes or any United States law,
regulation or stated policy (or interpretation thereof) restricting
the operation or use of United States-manufactured aircraft and
engines, (E) operated or used at any time for any illegal purpose or
in an illegal manner, (F) operated or located in an area excluded
from coverage by required insurance, or (G) (i) flown or operated
for any military purpose or (ii) located, operated or used in any
war zone or hostile area.
S-3-4
SCHEDULE 4
REPLACEMENT OF PARTS, ALTERATIONS, MODIFICATIONS AND ADDITIONS
UNDERTAKINGS
(Section 8D(l)(i)(A) of the Participation Agreement)
"Replacement of Parts, Alterations, Modifications and Additions Undertakings"
means the following:
(a) Replacement of Parts
The Lessee, at its own cost and expense or by application of any available
Maintenance Reserves and/or Security Deposits, shall promptly replace all
relevant Parts which may from time to time become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair, time-expired or
permanently rendered unfit for use for any reason whatsoever. In addition, in
the ordinary course of maintenance, service, repair, overhaul or testing, the
Lessee may remove any relevant Part, whether or not worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use; provided that the Lessee shall at its own cost and expense
replace such Part as promptly as practicable. All replacement Parts shall be
free and clear of all Liens (other than Permitted Liens) and shall be in as good
operating condition as, and shall have a value and utility and modification
status at least equal to, the Parts replaced, assuming such replaced Parts were
in the condition and repair and of the value and utility required to be
maintained by the terms of the relevant Operative Documents.
(b) Title to replaced and replacement Parts
(i) All Parts removed from the Airframe or an Engine shall remain the
property of the Lessor and subject to the Aircraft Mortgage, no
matter where located, until such time as such Parts shall be
replaced by Parts to which title shall have vested in the Lessor and
subject to the Aircraft Mortgage and which have been incorporated or
installed in or attached to the Airframe or such Engine and which
meet the requirements for replacement Parts specified in (a) above.
(ii) Immediately upon any replacement Part becoming incorporated,
installed or attached as provided above, without further act, (A)
title to the replaced Part shall thereupon vest in the Lessee, free
and clear of the Aircraft Mortgage and (B) subject to (c) below,
such replaced Part shall no longer be deemed a Part hereunder; (C)
title to the replacement Part shall on replacement vest in the
Lessee; and (D) such replacement Part shall be deemed to be a Part
to the same extent as the Parts originally incorporated or installed
in or attached to the Airframe or such Engine.
(iii) Any Part removed from the Airframe or any Engine may be subject to a
normal pooling agreement or arrangement customary in the airline
industry; provided that a Part which meets the requirements for
replacement Parts specified in (a) above shall be incorporated or
installed in or attached to the Airframe or such Engine in
accordance with (b)(i) and (b)(ii) above as promptly as possible
after the removal of such removed Part.
(c) Any replacement part when incorporated or installed in or attached to the
Airframe or an Engine from time to time may be owned by an air carrier
other than a Lessee, subject to a normal pooling arrangement; provided
that the Lessee, at its expense, as promptly thereafter as possible either
(A) acquires title to such replacement part free and clear of all Liens
(other than Permitted Liens), or (B) replaces such replacement part by
incorporating or installing in or attaching to the Airframe or an Engine a
further replacement part owned by the Lessee free and clear of all Liens
(other than Permitted Liens, such replacement part in either case
thereupon becoming a Part.
S-4-2
SCHEDULE 5
INSURANCE UNDERTAKINGS
(Section 8D(d) of the Participation Agreement)
"Insurance Undertakings" means the following:
(a) Public Liability, Bodily Injury and Property Damage Liability Insurance
The Lessee, at its own expense, shall maintain or cause to be maintained
in effect third party aircraft liability insurance (which includes coverage with
respect to liabilities arising while the Aircraft is not in operation) and
property damage liability insurance, including war risk, hijacking (air piracy),
confiscation, nationalization, expropriation and related perils coverages in an
amount not less than six hundred million Dollars ($600,000,000), per occurrence,
combined single limit.
All such policies shall be maintained in effect directly with independent
insurers of recognized reputation and financial responsibility satisfactory to
the Security Trustee and, in the case of third party liability insurance, the
Facility Agent. Any policies of insurance carried in accordance with these
undertakings and any policies taken out in substitution or replacement for any
of such policies shall:
(i) name each of the Secured Parties and all other Additional Insureds,
as additional insureds;
(ii) provide that in respect of the interests of the Additional Insureds
such policies of insurance shall insure the Additional Insureds
regardless of any breach or violation of any warranty, declarations
or conditions contained in such policies by any other insured party
other than Additional Insureds;
(iii) provide that if the insurers cancel such insurance for any reason
whatever, or the same is allowed to lapse for non-payment of
premium, or if there is any material change in policy terms and
conditions, such cancellation, lapse or change shall not be
effective until 30 days (and with respect to war risk insurance,
such shorter period as shall be customary in the international
aviation market for such insurance in such area of the world) after
prior written notice to the Security Trustee from such insurers or
brokers of such cancellation, lapse or change;
(iv) be primary without right of contribution from any other insurance
which may be available to any Additional Insured;
(v) expressly provide that all of the provisions thereof, except the
limits of liability, shall operate in the same manner as if there
were a separate policy covering each insured, but this provision
shall not operate to include any claim arising in respect of loss or
damage to the Aircraft or Engines insured under the hull insurance
provided below, and provided further that the Foregoing shall not
increase the total liability of the insurers beyond the limits of
liability stated in the policy;
(vi) provide that the insurers agree to waive any right of subrogation or
set-off, counterclaim or other deduction against any Additional
Insured;
(vii) provide for world wide coverage in full force and effect throughout
any geographical areas traversed by the Aircraft or Engines; and
(viii) provide, to the fullest extent customarily available in the
international aviation insurance markets, in respect of the Aircraft
at all times cover in respect of risks associated with failure of
any Computer System to be Year 2000 Compliant (so that if at any
time "Clause AVN2000 Date Recognition Clause" or any equivalent
clause is endorsed on the relevant policies, "Clause AVN2001 Date
Recognition Limited Coverage Clause" and "Clause AVN2002 Date
Recognition Limited Coverage Clause" or equivalent clauses are
similarly endorsed on such policies), where;
(A) "COMPUTER SYSTEM" means any computer hardware and software or
any equipment operated by electronic means; and
(B) "YEAR 2000 COMPLIANT": means, in relation to any Computer
System, that any references to or use of a date before, on or
after 31 December, 1999 in the operation of the Computer
System will not have an adverse effect on the use of that
Computer System.
Without increasing the scope of coverage under the airline liability
policies, the insurers thereunder shall acknowledge the existence of the
Aircraft Mortgages and the Operating Lessor Security Assignment and, if
available at no additional cost to the Lessee, provide coverage for the
indemnification provisions of the Participation Agreement and the Borrower
Indemnity Agreement. The insurers shall also, where appropriate and available,
acknowledge that the Secured Parties have no operational control over the
Aircraft.
(b) Insurance against loss or damage to the Aircraft
The Lessee, at its own or any Operating Lessee's expense, shall maintain
or cause to be maintained directly in effect with independent insurers of
recognized reputation and financial responsibility, satisfactory to the Security
Trustee:
(i) all-risk ground and flight aircraft hull insurance covering each
Aircraft;
(ii) all-risk spares coverage with respect to Engines or Parts while
removed from each Aircraft; and
(iii) war risk, hijacking (air piracy), confiscation, nationalization,
expropriation and related perils coverages covering each Aircraft
and its spares.
All such insurance shall be in full force and effect throughout any
geographical areas traversed at any time by the Aircraft or Engines, shall be
payable in Dollars and shall be in an amount of not less than the Aircraft
Agreed Value as to the Aircraft and, unless otherwise agreed by Ex-Im Bank, be
the subject of an Assignment of Insurances in form and substance reasonably
S-5-2
acceptable to the Security Trustee. Any hull insurance carried in accordance
with this paragraph shall not contain a provision for deductible self-insurance
amount in excess of one million Dollars ($1,000,000). Each Engine, after removal
from the Aircraft and while not installed on any other Airframe shall be insured
for not less than seven million five hundred thousand Dollars ($7,500,000) under
the policy referenced in (ii) above. Any policies carried in accordance with
this undertaking shall:
(i) provide that if such insurance is cancelled or materially changed
for any reason whatever, or the same is allowed to lapse for
non-payment of premium, such cancellation, change or lapse shall not
be effective for 30 days (and with respect to war risk insurance,
such shorter period as shall be customary in the International
Aviation market for such insurance in such area of the world) after
prior written notice to the Security Trustee from such insurers of
such cancellation or lapse or material change in policy terms and
conditions;
(ii) provide that in respect of the interests of the Additional Insureds
such policies of insurance shall insure each Additional Insured
regardless of any breach or violation of any warranty, declarations
or conditions contained in such policies by any other insured other
than the Additional Insureds;
(iii) include waivers by the insurers of any rights of subrogation or
set-off, counterclaim or other deduction whether by attachment or
otherwise, in respect of any liability of the Lessee except in
respect of premiums in respect of the Aircraft;
(iv) where appropriate and available, be primary without right of
contribution from any other insurance which may be available to any
Additional Insured; and
(v) provide that in the event of a dispute between the underwriters
subscribing to the Hull Risks Policy and the insurance underwriters
subscribing to the Hull War and Allied Risks Policy each policy
shall subscribe to 50% of the agreed valid claim in accordance with
"50/50" clause AVS 103.
(vi) Without increasing the scope of coverage under the airline liability
policies, the insurers thereunder shall acknowledge the existence of
the Aircraft Mortgage and the Operating Lessor Security Assignment
and the Assignment of Insurances (if applicable). The insurers shall
also, where appropriate and available, acknowledge that none of the
Secured Parties has any operational control over the Aircraft.
(c) Contract parties and documents
If and for as long as the same shall be customary or available in the
international aviation insurance markets, the Lessee shall ensure that for the
purposes of Lloyds Endorsement AVN 67B in relation to all policies of Insurance:
(i) this Agreement and the relevant Operative Documents are identified
as Contracts; and
S-5-3
(ii) the Additional Insureds are named as the Contract Parties.
(d) Application of Insurance Proceeds
Any Insurance Proceeds of any policy of Insurance received by the Security
Trustee shall be applied in accordance with Section 21 of the Participation
Agreement.
(e) Loss Payee
The Security Trustee shall be the sole loss payee in relation to Insurance
Proceeds.
(f) Reports, etc.
The Lessee and the Lessee's independent insurance broker shall advise the
Security Trustee in writing promptly of any default in the payment of any
premium and of any other act or omission on the part of the Lessee which might
invalidate or render unenforceable, in whole or in part, any insurance on the
Aircraft. On the renewal date of any insurance policy maintained with respect to
the Aircraft pursuant to this undertaking, the Lessee shall provide the Security
Trustee with the insurance certificates executed by an independent aircraft
insurance broker together with their letter of undertaking.
(g) Additional insurance
No additional insurance procured by the Lessee shall have the effect of
suspending, impairing, defeating, invalidating or rendering unenforceable or
reducing, in whole or in part, the coverage of or the proceeds payable under any
insurance required to be provided and maintained by the Lessee pursuant to this
undertaking.
(h) Additional Insureds not liable for premiums
All policies of insurance carried hereunder shall clearly state that none
of the Secured Parties nor any other Additional Insureds nor any assignee of
such party, shall have any liability for or obligation with respect to premiums,
commissions, assessments or calls, but shall have the right to pay the same with
respect to the Aircraft and/or any Engines.
(i) Continuing insurance
The Security Trustee and/or the Facility Agent may require the Lessee to
effect and to maintain (or procure) insurance after the end of the Term in
respect of the Aircraft with respect to its liability under the indemnities
under Section 10 of the Participation Agreement or under the Borrower Indemnity
Agreement for such period as the Security Trustee or the Facility Agent, as the
case may be, may require (but in any event not after the second anniversary of
the end of such Term). The Lessee's obligation under paragraph (i) shall not be
affected by the Lessee ceasing and/or any of the Indemnitees ceasing to have any
interest in the relevant Aircraft.
S-5-4
(j) Failure to insure
If the Lessee fails to insure or procure insurance for the Aircraft in
accordance with this undertaking, the Security Trustee may (but is not obliged
to):
(i) pay outstanding premiums or effect alternative insurance in respect
of the Aircraft to rectify the Lessee's failure and any cost
incurred by the Security Trustee in the exercise of this right shall
be reimbursed by the Lessee on demand together with interest thereon
equal to the Post-Default Rate, and
(ii) require the Aircraft to be grounded at an airport of its choice and
to remain there until it is once again insured in accordance with
this undertaking.
(k) Change in Industry Practice
In the event that there is a material change in the generally accepted
industry-wide practice with regard to the insurance of aircraft (whether
relating to all or any of the types of Insurance required to be effected under
the foregoing provisions of this undertaking) such that the Insurance required
pursuant to the provisions of this undertaking is insufficient to protect the
interests of Lessor and the other Additional Insureds hereunder, the Insurance
requirements set forth in this undertaking shall, following consultation between
the Lessee and the Security Trustee, be varied so as to include such additional
or varied requirements as may be reasonably necessary to ensure that the
Insurances as so varied shall provide comparable protection to that which it
would have provided if such change in the generally accepted industry-wide
practice had not occurred.
S-5-5
SCHEDULE 6
FILING DETAILS
Type of
Organization
(corporation, limited Jurisdiction Organizational ID
Current Legal liability company, of Number (if Current Mailing
Name (no trade names) etc.) Organization applicable) Address
--------------------------------- -------------------- ------------- ----------------- ----------------------
USEB Aircraft Limited Company Cayman N/A See Section 33 of the
Islands Participation Agreement
Xxxxx Leasing Limited Company Cayman N/A See Section 33 of the
Islands Participation Agreement
Xxxxxxx Leasing Corporation Corporation Delaware N/A See Section 33 of the
Participation Agreement
Xxxxxxx Leasing Limited Company Cayman N/A See Section 33 of the
Islands Participation Agreement
Xxxxxxx Leasing (Cyprus) Limited Company Cyprus N/A See Section 33 of the
Participation Agreement
Xxxxxxx Leasing (Ireland) Limited Company Ireland N/A See Section 33 of the
Participation Agreement
S-5-6
EXHIBIT A
EX-IM BANK GUARANTEE NO. AP077971XX - United States - GATX
UTILIZATION PROCEDURES FOR
CREDITS GUARANTEED BY EX-IM BANK
INTRODUCTION
In order to utilize the Ex-Im Bank Guarantee as provided in the
Participation Agreement among Lessee, Lessor, Lessor Parent, the Initial Lender,
the Facility Agent, the Security Trustee and Ex-Im Bank, Lessor must make a
request for utilization in respect of the Loan in an amount not to exceed the
sum of (i) 100% of the U.S.. content of the relevant Aircraft and (ii) 100% of
the Ex-Im Bank Exposure Fee. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the
Participation Agreement, unless the context clearly suggests otherwise.
There are three alternative methods for utilizing the Ex-Im Bank
Guarantee. Each method is subject to the conditions precedent set forth in the
Participation Agreement and to the conditions hereafter set forth. First, Lessor
may purchase an Aircraft, make payments to the supplier thereof, and then
request that a Disbursement be made to it to reimburse it for the amounts
advanced (the "REIMBURSEMENT PROCEDURE"). Second, Lessor may request that a
Disbursement be made directly to the supplier of the Aircraft (the "DIRECT
PAYMENT PROCEDURE"). Finally, Lessor may arrange for letters of credit to be
issued, confirmed or advised by one or more commercial banks in the United
States acceptable to the Facility Agent and Ex-Im Bank in favor of the suppliers
of an Aircraft and may then request that Ex-Im Bank issue its Certificate with
respect thereto (the "L/C PROCEDURE").
1. GENERAL
(a) TRANSACTION NUMBER. The transaction number assigned to the Ex-Im
Bank Guarantee (plus the country name) should appear on all of
Lessee's documentation and on all correspondence with the Lender,
the Facility Agent and Ex-Im Bank.
(b) ITEMS ELIGIBLE FOR FINANCING. The request for utilization must
identify the items to which the request relates as to quantity,
cost, seller (or provider) and U.S. origin. If the items contain
U.S. components, Ex-Im Bank will guaranty up to 100% of the U.S.
content of the items, provided the total amount to be financed with
respect to an Aircraft does not exceed 85% of the total Ex-Im
Bank-approved contract price of such Aircraft and the U.S. content
is not less than 50% of the contract price of such Aircraft.
Questions as to whether or not specific goods or services will be
considered as being of U.S. origin or manufacture so as to be
eligible for Ex-Im Bank's International Lending Division financing
should be submitted to Ex-Im Bank as early as possible.
Page 1
(c) OCEAN TRANSPORTATION MARITIME ADMINISTRATION WAIVERS. When
applicable, Lessee should make application for a waiver to use
non-U.S. vessels to the Director, Office of Market Development, Room
7207, Maritime Administration, Department of Transportation, 000 0xx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 (with a copy to Ex-Im Bank).
(d) PROGRESS PAYMENTS. To be eligible for financing under the Loan
Agreement, progress payments must be payable over the period of the
manufacture of the items or the construction of the project pursuant
to a contract approved by Ex-Im Bank providing for payments at times
and in amounts which will have a reasonable relationship, in Ex-Im
Bank's judgment, to the amounts expended by the suppliers.
(e) PAYMENTS. All payments disclosed in the Supplier's Certificate
(Annex 2 (Equipment)) must be satisfactory to Ex-Im Bank.
2. REIMBURSEMENT AND DIRECT PROCEDURE
The Request for Disbursement shall be made in writing to Ex-Im Bank in the
form of Annex 1 hereto, signed by an authorized representative of Lessor, and
shall be accompanied by the following documents, each of which shall be in form
and substance satisfactory to Ex-Im Bank:
(a) INVOICES. Copies of the invoices for the items bearing or
accompanied by evidence that the suppliers thereof have been paid.
Evidence of payment may be any of the following: (a) "paid" stamp on
the invoice signed by the supplier, (b) a copy of a U.S. commercial
bank's "Advice of Payment" to the supplier, (c) a copy of both sides
of a canceled check made payable to the supplier, or (d) a letter
from the supplier evidencing payment;
(b) SUPPLIER'S CERTIFICATES. Supplier's Certificates in the form of
Annex 2 (Equipment), signed by an authorized representative of the
Manufacturer. The Manufacturer should be instructed by [Original
Purchaser] to attach the Supplier's Certificate to the invoice
submitted by it to [Original Purchaser] for payment;
(c) DELIVERY DOCUMENTS. A certified copy of each of the FAA Export
Certificate of Airworthiness in respect of each Aircraft, the Xxxx
of Sale in respect of such Aircraft delivered by the Manufacturer
and the Acceptance Certificate acknowledging acceptance of delivery
of such Aircraft from the Manufacturer; and
(d) OTHER DOCUMENTS. Such other documents, statements, certificates,
information and evidence as Ex-Im Bank may from time to time
reasonably request (e.g., insurance certificates and certificates of
acceptance).
Page 2
3. L/C PROCEDURE
Lessor may request a commercial bank in the United States acceptable to
the Facility Agent and Ex-Im Bank (the "BANK") to issue, confirm or advise
letters of credit in favor of the suppliers of an Aircraft. Lessor must make
appropriate arrangements with the Bank regarding the issuance, confirmation or
advice of letters of credit and the payment of any fees which the Bank may
charge. The Bank will pay the supplier upon presentation of the documents
specified in the letter of credit. The Facility Agent will make independent
arrangements to reimburse the Bank for its share of such payments.
The Bank will not be obligated to issue, confirm or advise any letter of
credit until (i) the Facility Agent and the Bank have received from Ex-Im Bank a
Certificate Approving Letter of Credit in the form of Xxxxx 0 xxxxxx, (xx) the
Bank and the Facility Agent have entered into a reimbursement agreement and
(iii) the Bank has received from the beneficiary of such letter of credit its
irrevocable instructions, in form and substance satisfactory to the Facility
Agent, the Bank and Ex-Im Bank, to deduct from the amount of each payment under
the letter of credit an amount equal to the Ex-Im Bank Exposure Fee payable to
Ex-Im Bank in connection with each Utilization of the Credit pursuant to the
terms of the Loan Agreement, and to pay such amount directly to Ex-Im Bank. A
disbursement shall be deemed to occur when the Bank makes payment of a draft
drawn under the letter of credit. The sum of the amounts so paid to the
beneficiary and to Ex-Im Bank shall constitute the amount of the Disbursement.
Ex-Im Bank will issue its Certificate Approving Letter of Credit to the
Facility Agent and the Bank upon receipt from the Bank of the following:
(a) REQUEST FOR LETTER OF CREDIT APPROVAL. A Request for Letter of
Credit Approval in the form of Annex 4 hereto, signed by an
authorized representative of Lessor;
(b) PROPOSED OF LETTER OF CREDIT. Three copies of the proposed letter of
credit in favor of the supplier of the relevant Aircraft, complete
in all respects, except for date and signature by the Bank, and
accompanied by a copy of the related pro forma invoice and purchase
order or contract (unless previously furnished to Ex- lm Bank);
(c) SUPPLIER'S CERTIFICATES (L/C APPLICATION). A Supplier's Certificate
(L/C Application) in the form of Annex 6 hereto, signed by an
authorized representative of the supplier; and
(d) OTHER DOCUMENTS. Such other documents, statements, certificates,
information and evidence as Ex-Im Bank may from time to time
reasonably request.
Lessor's instructions to the Bank for the issuance, confirmation or advise
of letters of credit shall require that the documents to be presented for
drawings under the letter of credit meet the documentary requirements of the
Loan Agreement, including the submission of invoices, supplier's certificates
and bills of lading as specified in above. Invoices need not be accompanied by
evidence of payment.
Page3
Annexes:
1 - Request for Disbursement
l(a) - Itemized Statement of Payments
2 - Exporter's Certificate (Equipment)
[Annexes 3, 4, 5 and 6 have been Intentionally Omitted]
PAGE 4
ANNEX 1
REQUEST FOR DISBURSEMENT
__________ __, _____
Barclays Bank PLC
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Structured Trade and Export Finance
Export-Import Bank of the United States
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Vice-President-Credit Administration Division
Subject: Ex-Im Bank Guarantee No. AP077971XX - United States - GATX
Ladies and Gentlemen:
In accordance with the terms and conditions of the Loan Agreement ("LOAN
AGREEMENT") dated as of April 30, 2002 by and among USEB Aircraft Limited, as
initial borrower party [and, pursuant to a Designation Letter dated
[_______________________], [#New Borrower Party#]* (the "BORROWER"), Barclays
Bank PLC, as initial lender, Barclays Bank PLC, as facility agent, Xxxxx Fargo
Bank Northwest, N.A., as Security Trustee, and Export-Import Bank of the United
States ("EX-IM BANK"), we hereby request the Lenders to make a disbursement to
the Borrower under the Loan Agreement in the amount of
U.S.$___________on__________.
We enclose our Itemized Statement of Payments
dated___________________________,______.
We hereby certify with respect to the payments made by us for the goods
and services specified in the Itemized Statement of Payments that:
1. All such payments will, simultaneously with the making of the
Disbursement hereby requested, be made exclusively for the
purchase in the United States of goods and services of U.S.
origin or manufacture (except as disclosed in the enclosed
Supplier's Certificate) and that these goods and services will
be used for lawful purposes in accordance with the terms of
the Loan Agreement.
----------
* Insert if Initial Borrower is not the Initial Borrower Party.
Page 1
2. We have not previously requested disbursements on account of
these payments;
3. Copies of invoices and bills of lading with attached
Supplier's Certificate (accompanied, where appropriate, by
evidence that the suppliers have been paid) and other
documents required by Ex-Im Bank's "Utilization Procedures"
relating to the goods and services specified in Itemized
Statement of Payments are submitted herewith.
4. All of those goods which have been or will be transported to
the [ ] (4) on ocean vessels have been or will be shipped on
vessels of U.S. registry, except to the extent that a waiver
of this requirement has been obtained from the U.S. Maritime
Administration.
We further certify that (i) we will be paid the exact amounts set forth in
Itemized Statement of Payments for the goods and services specified therein, and
we have not received or agreed to receive any discount, allowance, rebate,
commission, fee or other payment in connection with the acquisition of such
goods and services, except as disclosed in the enclosed Supplier's Certificate
and Invoice, (ii) we have not paid or agreed to pay any commission, fee or other
payment and, to the best of our knowledge and belief, no U.S. supplier has
granted, paid or agreed to grant or pay any discount, allowance, rebate,
commission, fee or other payment in connection with the sale of or the obtaining
of any contract to sell such goods and services or with the establishment or
operation of the Ex-Im Bank-assisted financing (including any Preliminary
Commitment relating thereto issued by Ex-Im Bank), other than as disclosed in
the enclosed Supplier's Certificate and Invoice, (iii) as of the date of this
request, no Default under the provisions of the Loan Agreement has occurred and
is continuing and (iv) as of the date of this request, the representations and
warranties made by us in the Loan Agreement are true.
Unless otherwise provided herein, the defined terms used in this Request
for Disbursement shall have the respective meanings specified in the Loan
Agreement.
Very truly yours,
[#INITIAL BORROWER#]
By: ____________________________
Name:
Title:
Enclosures
----------
(4) Initial State of Registration.
Page 2
Itemized Statement of Payments
and supporting documents
PAGE 3
ANNEX l(a)
ITEMIZED STATEMENT OF PAYMENTS
________ __, ___
Page 1 of 1
EX-IM BANK GUARANTEE NO. AP077971XX - UNITED STATES - GATX
ITEMIZED STATEMENT OF PAYMENTS
ATTACHMENT TO REQUEST FOR DISBURSEMENT
Invoice No.: _______________
Date of Payment: __________ ____,____
Amount of Payment: $_______________
Name and Address
of Supplier: The Boeing Company
Brief Description
of Items: One Boeing Model 737-800 Aircraft (MSN_____)
Calculation of Loan:
Contract Amount $
Airframe Credits $
Engine Credits $
Base Amount $
[83.13%/81.57%] of Base Amount $
3% Exposure Fee $
Total Loan
Page 1
ANNEX 2
FORM OF EXPORTER'S CERTIFICATE
Name and U.S. Street Address of Exporter:
Date:___________________
RE: Ex-Im Bank Credit/Guarantee/Insurance Number: __________________________
Purchaser: _________________________________
Supply Contract/Purchase Order No.(s) _________________________
Check one: [ ]Initial Exporter's Certificate
[ ]Amended Exporter's Certificate. The following has changed:
[specify]
We understand that the Export-Import Bank of the United States ("Ex-Im Bank")
provides credit support to promote U.S. export sales, and that Ex-Im Bank will
determine the scope of its support for our sale to the Purchaser based on the
information provided below. To aid in this determination, we, the Exporter,
hereby certify:
PART A: CONTENT
1. Content. This information is based on our best efforts to assess the value
of the goods and services ("Goods and Services") to be provided under our
supply contract or signed purchase order with the Purchaser (the "Supply
Contract/Purchase Order(s)"). Content changes may need to be reported via
an amended Exporter's Certificate (see Part C below). Check one:
[ ]The Goods and Services contain only U.S. Content: the U.S. Content
Percentage is 100% (i.e., no Foreign Content Local Costs, or Excluded
Goods and Services (defined below)). Please do not complete the chart if
this box is checked.
[ ] The Goods and Services contain less than 100% U.S. Content. Please
complete the chart if this box is checked.
Definition USD
---------------------------- ------------------------------------------------------------------ ---
A. Supply The aggregate price of all Goods and Services in the
Contract/Purchase Supply Contract/Purchase Order(s)
Order(s)
B. Excluded Goods The aggregate price of all Goods and Services that are not
and Services eligible for (or excluded from) Ex-Im Bank support (e. g., goods
not shipped from the U.S.)
C. Contract Price A minus B
D. Local Costs The aggregate price of all Goods originated/manufactured in
the Purchaser's country and all Services provided by
residents of the Purchaser's country.
E. Net Contract Price C minus D
F. Foreign Content The aggregate cost to the Exporter of any Goods (or components
thereof) that were produced or manufactured outside the U.S.,
Services provided by third country-resident personnel, and foreign
freight costs and foreign insurance included in the Net Contract
Price for Goods exported from the U.S. (Such amount shall not
include any Local Costs.)
X. X.X. Content E minus F
H. U.S. Content Percentage G divided by E, expressed as a percentage. %
I. Disbursement Percentage Initial Exporter's Certificate: input the lower of (i) 85% and %
(ii) the percentage in H. Amended Exporter's Certificate: input
the percentage obtained from the Disbursement Percentage
Calculator page (if any).
Page 1
PART B: CERTIFICATIONS
We hereby certify, as to ourselves and the Ex-Im Bank-approved Goods and
Services sourced from the U.S. and the Purchaser's country, as follows:
2. 15% Cash Payment. We (i) have received (or will receive) payment for at least
15% of the Net Contract Price, and/or (ii) have financed (or will finance) such
amount at market rates. We have submitted (or will submit) evidence of payment
of our invoices. (For 100% U.S. Goods and Services, "Net Contract Price" means
the aggregate price of such Goods and Services.)
3. Invoices and Shipment. We have provided (or will provide) copies of(i)
invoices describing the Goods and Services and (ii) signed, clean, onboard bills
of lading evidencing that the Goods included in the Net Contract Price have been
shipped from the U.S. to the Purchaser's country. For Services, progress
payments for Goods prior to shipment, and/or Local Costs, the value of the work
performed at the time the invoices therefor are submitted for payment shall
equal or exceed the amount so invoiced (or we have obtained Ex-Im Bank's prior
consent to an alternative arrangement).
4. Suspension and Debarment. WE AND EACH OF OUR PRINCIPALS INDIVIDUALLY, HAVE
NOT WITHIN THE PAST 3 YEARS BEEN A) DEBARRED, SUSPENDED, DECLARED INELIGIBLE
FROM PARTICIPATING IN, OR VOLUNTARILY EXCLUDED FROM PARTICIPATION IN, A COVERED
TRANSACTION, B) FORMALLY PROPOSED FOR DEBARMENT, WITH A FINAL DETERMINATION
STILL PENDING, C) INDICTED, CONVICTED OR HAD A CIVIL JUDGMENT RENDERED AGAINST
US FOR ANY OF THE OFFENSES LISTED IN THE REGULATIONS, D) DELINQUENT ON ANY
SUBSTANTIAL DEBTS OWED TO THE U.S. GOVERNMENT OR ITS AGENCIES OR
INSTRUMENTALITIES AS OF THE DATE OF EXECUTION OF THIS CERTIFICATION; OR WE HAVE
RECEIVED A WRITTEN STATEMENT OF EXCEPTION FROM EX-IM BANK ATTACHED TO THIS
CERTIFICATION, PERMITTING PARTICIPATION IN THIS COVERED TRANSACTION DESPITE AN
INABILITY TO MAKE CERTIFICATIONS A) THROUGH D) IN THIS PARAGRAPH.
We further certify that we have not and will not knowingly enter into any
agreements in connection with the Goods and Services with any individual or
entity that has been debarred, suspended, declared ineligible from participating
in. or voluntarily excluded from participation in a Covered Transaction. All
capitalized terms not defined herein shall have the meanings set forth in the
Government-wide Non-procurement Suspension and Debarment Regulations -Common
Rule (Regulations).
5. Other Payments: Legal Compliance. Without Ex-Im Bank's written consent, a
copy of which is attached, we have not and will not agree to, offer to, cause
to, or arrange for, directly or indirectly, any payment, discount, allowance,
rebate, commission, fee or other payment in connection with the sales of the
Goods and Services under (or obtaining) the Supply Contract/Purchase Order(s) or
Ex-Im Bank Credit/Guarantee/Insurance, except for a) payment of manufacturing
costs or for the purchase of the Goods, b) the regular remuneration of our
regular full-time directors, officers and employees; c) regular commissions or
fees, if any, to our regular sales agent, broker or representative and readily
identifiable on our books and records as to amount, purpose and recipient; d)
any discounts, allowances, or rebates to the Purchaser that are disclosed in our
invoices; or e) any letter of credit or other fees paid to commercial banks or
any payments made to Ex-Im Bank in connection with the Ex-Im Bank
Credit/Guarantee/Insurance.
In addition, we have not, and will not, engage in any activity in
connection with this transaction that is a violation of the Foreign Corrupt
Practices Act of 1977, 15 U..S.C. " 78dd-1, et seq. To the best of our
knowledge, the Supply Contract/Purchase Order(s)and the performance by the
parties of their respective obligations thereunder does not violate any
applicable law.
6. Munitions List. Except as described on our attached statement, none of the
Goods and Services are on the U.S. Munitions List (part 121 of Title 22 of the
Code of Federal Regulations).
PART C: CHANGES AND EX-IM BANK RELIANCE
7. Changes to Certifications. With respect to Part A, we will promptly complete
and submit an amended Exporter's Certificate if there has been a "material
change" in the U.S. Content Percentage (together with a copy of the completed
"Disbursement Percentage Calculator" found at xxx.xxxx.xxx/xxxxxxxx.xxxx) prior
to any further- presentation of invoices for payment. A "material change" in the
U.S. Content Percentage occurs if (a) the U.S. Content Percentage has decreased
by more than 5% (as compared to the U.S. Content Percentage reported in the
Page 2
initial Exporter's Certificate) and (b) aggregate foreign content is over 20%
(i. e.. the new U.S. Content Percentage is less than 80%)
Page 3
With respect to Parts B or C. if any of the certifications made therein
become untrue, we will promptly submit an amended Exporter's Certificate, noting
the changes and with any required attachments, prior to any further presentation
of invoices for payment.
8. Ex-Im Bank Reliance. With knowledge that Ex-Im Bank will rely on the
certifications and representations made in this Certificate, we agree we are
liable for any damages suffered by Ex-Im Bank's reliance. We understand that
these certifications are subject to the penalties for fraud provided in Article
18 U.S.C., Section 1001. We agree that presentation of invoices for payment
under Ex-Im Bank Credit/Guarantee/Insurance is a confirmation by us of the
information and certifications made herein. By his signature, the person signing
this Certificate on behalf of the Exporter represents that he is fully
authorized to do so. We agree to provide additional information with respect to
any of the matters covered in this Certificate upon Ex-Im Bank's reasonable
written request.
[EXPORTER]
By: ________________________________
(Authorized Officer or Employee)
Name:
Title:
Page 4
INSTRUCTIONS TO EXPORTERS:
PART A: CONTENT
The information provided in Part A will be used to determine the total
amount of Ex-Im Bank guarantee, loan or insurance support for a
transaction. Please refer to Ex-Im Bank's Fact Sheets on Foreign Content,
Local Costs, and Ancillary Services at xxxx://xxx.xxxx.xxx/xxxx.xxxx for a
further explanation of Ex-Im Bank's content and cover policies.
PART B: CERTIFICATIONS
The certifications in Part B cover those Goods and Services sourced from
U.S. (or the Purchaser's country) and approved as eligible for coverage
under an Ex-Im Bank Credit/Guarantee/Insurance. If you have any question
about what Goods and Services are approved by Ex-Im Bank, please contact
your Ex-Im Bank credit officer. For Long-Term transactions (credit over
$10MM or more than 7 years repayment), such "Goods and Services" are those
listed in the current Acquisition List submitted by the Borrower to Ex-Im
Bank.
INITIAL EXPORTER'S CERTIFICATE
The Exporter's Certificate must be completed by the Exporter and presented
prior to the borrower's first request for disbursement related to that
exporter's invoices under the Ex-Im Bank-supported credit. Exporter's
Certificates are also to be completed by U.S. and non-U.S. providers of
ancillary services (such as banking, financial advisor, technical
consultant, and legal) that have been approved by Ex-Im Bank for financing
under the Ex-Im Bank Credit/Guarantee/Insurance.
AMENDED EXPORTER'S CERTIFICATES
If an amended Exporter's Certificate is required pursuant to Section 7 of
the Certificate, the Exporter should check the "Amended Exporter's
Certificate" box at the top of the Certificate and note the change being
reflected in the amended Certificate. The Exporter should contact the
lender under an Ex-Im Bank Guarantee/Insurance transaction, or Ex-Im Bank
if an Ex-Im Bank Credit, for instructions on where to send the Amended
Exporter's Certificate.
Please note that a change to Part A (Content) requires the Exporter to
attach a copy of the "Disbursement Percentage Calculator" to the Amended
Exporter's Certificate. The Calculator allows the Exporter to calculate
the new disbursement percentage for the transaction. The Calculator (and
instructions) are found at xxxx://xxx.xxxx.xxx/xxxxxxxx.xxxx. Changes to
Sections 4 and 5 of Part B require the relevant Ex-Im Bank approval to be
attached.
LINKS AND ADDITIONAL INFORMATION
For information regarding the Exporter's Certificate (and other helpful
facts), go to xxxx://xxx.xxxx.xxx/xxxx.xxxx. Should you have any further
questions regarding the Exporter's Certificate, please call Credit Review
and Compliance Division at (000) 000-0000. For insurance transactions,
please contact your insurance broker or appropriate Ex-Im Bank regional
office.
CONTENT REPORTS AND AGGREGATE FOREIGN CONTENT CAUSE REPORTS:
For informational and reporting purposes only, Ex-Im Bank requests that
Exporters submit Content Reports and an annual Aggregate Foreign Content
Cause Report. Under Medium-Term transactions a Content Report should be
submitted with the Application for Ex-Im Bank support. Under Long-Term
transactions the Content Report should be submitted with the initial
Exporter's Certificate. If at the completion of the work performed under a
Supply Contract/Purchase Order(s), the foreign content amount changed by
one percentage point or more of the value of the Net Contract Price,
Exporters should submit a final revised Content Report within 60 days.
Ex-Im Bank may contact Exporters to reconfirm the information provided in
the Content Report.
Page 5
Exporters are requested to submit an annual Aggregate Foreign Content
Cause Report containing information about the reasons for foreign content
in Supply Contract/Purchase Orders.
The processing or approval of, or disbursements under, an Ex-Im Bank
Credit/Guarantee/Insurance transaction will not be affected by the
submission (or not) of Content Reports or Aggregate Foreign Content Cause
Reports.
Content Report and Aggregate Foreign Content Cause Report forms and
instructions can be found at xxxx://xxx.xxxx.xxx/xxxx.xxxx. Should you
have any questions regarding the Content Report or Aggregate Foreign
Content Cause Report, please call the Policy Group at (000) 000-0000.
Page 6
EXHIBIT B
FORM OF ACCESSION CERTIFICATE
To: Barclays Bank PLC
ACCESSION CERTIFICATE
relating to the Participation Agreement dated as of April 30, 2002 among, inter
alios, USEB Aircraft Limited, as Initial Borrower Party and Initial Lessor
Party, the Initial Lessee Parties defined therein, Walkers SPV Limited, as
Initial Lessor Parent, Barclays Bank PLC, as Initial Lender, Barclays Bank PLC,
as Facility Agent, Xxxxx Fargo Bank Northwest, N.A., as Security Trustee, GATX
Financial Corporation and Export-Import Bank of the United States (the
"PARTICIPATION AGREEMENT"). Unless otherwise defined herein, terms used in the
Participation Agreement shall have the same respective meanings herein.
1. *[ ] (the "LENDER") confirms that the Lender and *[ ]
(the "TRANSFEREE") have entered into a transfer and/or assignment in
accordance with the Loan Agreement pursuant to which the Transferee has
acquired as of *[__________,____] (the "TRANSFER DATE") from the Lender
*[ ]% of the Lender's participation in the Loan(s) in respect of
[Aircraft msn #].
2. The Transferee confirms, as of the Transfer Date, that:
(i) the Lender has assigned to the Transferee, inter alia, the above
portion of its right, title and interest in and to the Loans, the
relevant Notes and the other Operative Documents (the "TRANSFERRED
PROPERTY") to which the Lender is party and the Transferee has
accepted such assignment of the Transferred Property; and
(ii) the Transferee has agreed to assume the corresponding obligations of
the Lender and the Transferee has agreed to be under the same
obligations towards each of the Lessee Parties, Lessees, Lessor
Parties, Lessors, Borrower Parties, Borrowers, Lessee Parents,
Lessor Parents, Guarantors, the Lenders, the Facility Agent, the
Security Trustee and Ex-Im Bank under the Participation Agreement as
if it were an original party to the Participation Agreement.
----------
Insert details as appropriate.
Page 1
Signed by:
[Lender]
By: _________________________________
Date:
Signed by: ___________________________
[Transferee]
By:
Date:
Address/Branch or Office:
[
Page 2
EXHIBIT C-1
[FORM OF] DESIGNATION LETTER
______________, _______
TO: BARCLAYS BANK PLC
AS FACILITY AGENT
AND: EXPORT-IMPORT BANK OF THE UNITED STATES ("EX-IM BANK")
Attention:
Ladies and Gentlemen:
We make reference to the Participation Agreement (as amended,
supplemented and otherwise modified and in effect from time to time, the
"Participation Agreement") dated as of April 30, 2002 originally entered into
among USEB Aircraft Limited, Xxxxx Leasing Limited, Xxxxxxx Leasing Limited,
Xxxxxxx Leasing Corporation, Xxxxxxx Leasing (Ireland) Limited, Xxxxxxx Leasing
(Cyprus) Limited, Walkers SPV Limited, as Initial Lessor Parent, Barclays Bank
PLC, as the Initial Lender and Facility Agent, GATX Financial Corporation
("GFC"), Ex-Im Bank and the Security Trustee. Terms defined in the Participation
Agreement are used herein as defined therein.
In accordance with Section 6A(a) of the Participation Agreement, GFC
hereby designates [___________________] (the ["Designated Borrower Party"] [the
"Designated Lessor Party"][the "Designated Borrower Party and Designated Lessor
Party"][the "Designated Lessee Party"]), a [corporation] [company] [trust] duly
[incorporated] [formed] under the laws of [___________________], as a
[Borrower][Lessor][Borrower and Lessor][Lessee] Party for the purposes of the
Operative Documents.
The [Designated Borrower] [Designated Lessor] [Designated Borrower
and Designated Lessor][Designated Lessee] Party hereby accepts the above
designation and hereby expressly and unconditionally accepts the obligations of
a [Borrower] [Lessor] [Borrower and Lessor][Lessee] Party under the
Participation Agreement and other Operative Documents, adheres to the
Participation Agreement and agrees and confirms that, upon your execution and
return to GFC of the enclosed copy of this letter, it shall be a [Borrower]
[Lessor] [Borrower and Lessor] [Lessee] Party for purposes of the Participation
Agreement and the other Operative Documents relating to such Aircraft and agrees
to be bound by and perform and comply with the terms and provisions of the
Participation Agreement and such other Operative Documents as if it had
originally executed the Participation Agreement and such other Operative
Documents as a [Borrower][Lessor][Borrower and Lessor][Lessee] Party.
Page 1
Further information relevant to the [Designated Borrower][Designated
Lessor][Designated Borrower and Designated Lessor][Designated Lessee] Party is
set forth in Annex 1 hereto.
GFC hereby represents and warrants to the Facility Agent and each
other Secured Party that, before and after giving effect to this Designation
Letter no Lease Default or Loan Default has occurred which is continuing.
GATX FINANCIAL CORPORATION
By _________________________
Title:
[NAME OF DESIGNATED ENTITY]
By __________________________
Title:
ACCEPTED
BARCLAYS BANK PLC,
as Facility Agent
By _______________________________________
Title:
EXPORT-IMPORT BANK OF THE UNITED STATES
By _______________________________________
Title:
Page 2
Annex 1 to Designation Letter
[** Include all relevant information relevant for a Designation and to the
satisfaction of the conditions precedent under Section 6(A)(c) of the
Participation Agreement**]
Page 3
EXHIBIT C-2
FORM OF SUBSTITUTION SUPPLEMENT
AIRCRAFT MSN [ ]
This Supplement to the Participation Agreement is made on [ ] between:
1. [ ](l), a [#typeof entity#] [#incorporated/organized/formed#]
under the laws of [#jurisdiction#], (the "EXISTING PERSON");
2. [ ](2), a [#type of entity#] [#incorporated/organized/formed#]
under the laws of [#jurisdiction#] (the "REPLACEMENT PERSON");
3. GATX FINANCIAL CORPORATION, a Delaware corporation, as a Guarantor
("GFC");
4. XXXXX FARGO BANK NORTHWEST, N.A., a national banking association duly
organized and validly existing under the laws of the United States of
America, not in its individual capacity but solely as Security Trustee
(the "SECURITY TRUSTEE");
5. BARCLAYS BANK PLC, a public limited company incorporated under the laws of
England and Wales, as facility agent for the Lenders ("FACILITY AGENT");
and
6. EXPORT-IMPORT BANK OF THE UNITED STATES ("EX-IM BANK").
THIS SUPPLEMENT WITNESSES:
SECTION 1. Supplement. (a) This Supplement is supplemental to that certain
Participation Agreement dated as of April 30, 2002 (as amended, supplemented or
otherwise modified from time to time, the "PARTICIPATION AGREEMENT"), among,
inter alios, the Existing Person, as a [Borrower Party/Lessor Party/Borrower
Party and Lessor Party/Lessee Party] (3), the Facility Agent; the Security
Trustee; GFC and Ex-Im Bank.
(b) The Existing Person is the [Borrower/Lessor/Borrower and Lessor/Lessee
] (4) with respect to the Aircraft Lease, and Note (each as defined below). This
Supplement is the Substitution Supplement to be delivered to the Facility Agent
and Ex-Im Bank pursuant to Section 6B(a) of the Participation Agreement.
SECTION 2. Definitions, (a) For the purposes of this Supplement, unless
the context otherwise requires, the following capitalized terms have the
following respective meanings:
-----------------------------------
(1) Insert name of relevant Person.
(2) Insert name of relevant Person.
(3) Insert as applicable
(4) Insert as applicable
"AIRCRAFT" shall mean the Boeing Model 737-800 aircraft bearing [ ](5)
registration xxxx [ ] and manufacturer's serial number [ ].
"BORROWING DATE" shall mean [ ], 200[3/4].
"LEASE" shall mean the Lease and Credit Sale Agreement No. [ ] dated as of
the Borrowing Date in relation to the Aircraft.
"LOAN" shall mean the Loan in respect of the Aircraft advanced on the
Borrowing Date.
"NOTE" shall mean the promissory note dated the Borrowing Date issued in
connection with the Aircraft.
"SUBSTITUTION DATE" shall mean the date of this Supplement.
(b) All other capitalized terms used in this Supplement and not otherwise
defined herein and all schedules to this Supplement have the respective meanings
set forth in Part I of Appendix A to the Participation Agreement.
(c) The rules of construction and interpretation for this Supplement and
all schedules to this Supplement shall be as set forth in Part II of Appendix A
to the Participation Agreement.
SECTION 3. Substitution. (a) In accordance with Section 6B(a) of the
Participation Agreement, the Existing Person is hereby replaced with the
Replacement Person as [the Lessee (i) under the Lease and (ii) for the purposes
of the other Operative Documents][the Lessor (i) under the Lease and (ii) for
the purposes of the other Operative Documents referable to the Aircraft] [and]
[the Borrower (1) of the Loan, (2) under the Note and (3) for the purposes of
Operative Documents referable to such Loan and Note].
(b) With effect on and from the Substitution Date, the Replacement
Person hereby (i) accepts the above substitution and hereby expressly and
unconditionally accepts and assumes the obligations of [the Lessee under the
Lease and for the purposes of the other Operative Documents referable to the
Aircraft] [the Lessor under the Lease and for the purposes of the other
Operative Documents referable to the Aircraft][and][the Borrower of the Loan and
under the Note and for the purposes of the other Operative Documents referable
to the Aircraft], (ii) adheres to such Operative Documents and agrees and
confirms that it shall be [the Lessee of the Aircraft under the Lease and for
the purposes of the applicable Operative Documents referable to the Aircraft]
[the Lessor of the Aircraft under the Lease and for the purposes of the other
Operative Documents referable to the Aircraft][and][the Borrower of the Loan and
under the Note and for the purposes of the other Operative Documents referable
to the Aircraft] and (iii) agrees to be bound by and perform and comply with the
terms and provisions
----------
(5) Insert Initial State of Registration of the Aircraft.
2
thereof in such [capacity] [capacities] as if it had originally executed such
Operative Documents in such [capacity][capacities].
SECTION 4. Representations and Warranties of the Existing Person. The
Existing Person hereby represents and warrants to each of the parties to the
Participation Agreement, in relation to itself, as of the Substitution Date (and
each representation and warranty shall survive the Substitution Date), that:
(a) Existing Person is a [#company incorporated#] under the laws of
[#jurisdiction#] and has the power and authority to enter into and to
perform its obligations under this Supplement; and
(b) this Supplement has been duly authorized by all necessary
corporate action on the part of Existing Person, has been duly executed and
delivered by Existing Person and constitutes the valid, legal and binding
obligation of Existing Person enforceable in accordance with its terms except
insofar as enforceability may be limited by (i) applicable bankruptcy and
similar laws afflicting creditors' rights generally or (ii) general principles
of equity.
SECTION 5. Representations and Warranties of the Replacement Person. The
Replacement Person hereby represents and warrants to each of the parties to the
Participation Agreement, in relation to itself, as of the Substitution Date (and
each representation and warranty shall survive the Borrowing Date), that:
(a) Replacement Person is a [#company incorporated#] under the laws
of [#jurisdiction#] and has the power and authority to enter into and to perform
its obligations under this Supplement; and
(b) this Supplement has been duly authorized by all necessary
corporate action on the part of Replacement Person, has been duly executed and
delivered by Replacement Person and constitutes the valid, legal and binding
obligation of Replacement Person enforceable in accordance with its terms except
insofar as enforceability may be limited by (i) applicable bankruptcy and
similar laws afflicting creditors' rights generally or (ii) general principles
of equity.
(c) the representations and warranties in [Section [3](6)[4](7) of
the Borrowing Date Supplement referable to the Aircraft] [[and] Section 8 of the
Loan Agreement](8) are true and correct as of the date hereof, with reference to
facts and other circumstances prevailing as of the date hereof and on the basis
that all references therein or deemed to be therein to the Borrowing Date or the
Signing Date shall be deemed to be references to the date hereof and that the
references in [that/those] Section[s] to ["Lessee"/"Lessor"/"Borrower"/"Lessor"
and "Borrower", as the case may be] were to
----------
(6) Insert if Replacement Person is a Lessee
(7) Insert if Replacement Person is a Lessor
(8) Insert if Replacement Person is a Borrower
3
the Replacement Person. [#with such qualifications, if any, agreed between GFC
and Ex-Im Bank#]
SECTION 6. Representations and Warranties of GFC. GFC hereby represents
and warrants to each of the parties to the Participation Agreement, as of the
Substitution Date, that, before and after giving effect to the Substitution
under Section 3, no Lease Default or Loan Default has occurred which is
continuing.
SECTION 7. Miscellaneous. The Participation Agreement and the other
Operative Documents shall remain unchanged (except as supplemented hereby), and
in full force and effect.
SECTION 8. Governing Law. This Supplement shall in all respects be
governed by the law of the State of New York.
4
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed as of the day and year first above written.
EXISTING PERSON
[__________________________]
By:________________________
Name:______________________
Title:_____________________
REPLACEMENT PERSON
[__________________________]
By:________________________
Name:______________________
Title:_____________________
SECURITY TRUSTEE
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in
its individual capacity but
solely as Security Trustee
By:________________________
Name:______________________
Title:_____________________
FACILITY AGENT
BARCLAYS BANK PLC
By:________________________
Name:______________________
Title:_____________________
0
XX-XX XXXX
XXXXXX-XXXXXX XXXX XX XXX
XXXXXX XXXXXX
By:________________________
Name:______________________
Title:_____________________
GUARANTOR
GATX FINANCIAL CORPORATION
By:________________________
Name:______________________
Title:_____________________
6
EXHIBIT D
FORM OF BORROWING DATE SUPPLEMENT NO. [ ]
AIRCRAFT MSN [ ]
This Supplement to the Participation Agreement is made on [ ] 200[2/3] between:
1. [ ](1), a [#type of entity#] [#incorporated/organized/formed under the
laws of [#jurisdiction#], (the "LESSEE");
2. [ ](2), a [#type of entity#] [#incorporated/organized/formed#] under the
laws of [#jurisdiction#] (the "BORROWER" or "LESSOR");
3. GATX FINANCIAL CORPORATION, a Delaware corporation, as a Guarantor
("GFC"); and
4. XXXXX FARGO BANK NORTHWEST, N.A., a national banking association duly
organized and validly existing under the laws of the United States of
America, not in its individual capacity but solely as Security Trustee
(the "SECURITY TRUSTEE")
THIS SUPPLEMENT WITNESSES:
SECTION 1. Supplement. (a) This Supplement is supplemental to that certain
Participation Agreement dated as of April 30, 2002 (as amended, supplemented or
otherwise modified from time to time, the "PARTICIPATION AGREEMENT"), among,
inter alios, the Borrower, as [the Initial] [a] Borrower Party and [the Initial]
[a] Lessor Party; the Lessee, as [an Initial] [a] Lessee Party, Barclays Bank
PLC, as Initial Lender and Facility Agent for the Lenders; the Security Trustee;
GFC and Export-Import Bank of the United States.
(b) The Borrower is the Initial Lessor and Initial Borrower with respect
to the Aircraft and the Lessee is the Initial Lessee of the Aircraft. This
Supplement is the Borrowing Date Supplement to be delivered to the Facility
Agent and Ex-Im Bank pursuant to Section 4B(e) of the Participation Agreement in
connection with the Aircraft on the Borrowing Date.
SECTION 2. Definitions. (a) For the purposes of this Supplement, unless
the context otherwise requires, the following capitalized terms have the
following respective meanings:
"AIRCRAFT" shall mean the Boeing Model 737-800 aircraft bearing [ ](3)
registration xxxx [ ] and manufacturer's serial number [ ].
----------
(1) Insert name of relevant Lessee Party.
(2) Insert name of relevant Borrower Party.
(3) Insert Initial State of Registration of the Aircraft.
"AIRCRAFT MORTGAGE" shall mean the First Priority Mortgage and Security
Agreement dated as of the Borrowing Date among the Lessor, Lessee and the
Security Trustee in respect of the Aircraft.
"AIRCRAFT SECURITY DOCUMENTS" shall mean the Operative Documents listed in
Schedule 1 hereto.
"BORROWING DATE" shall mean the date of this Supplement.
"CIVIL AVIATION AUTHORITY" shall mean [ ](4).
"INITIAL OPERATING LEASE" shall mean the Aircraft Lease Agreement dated as
of[ ] between the Initial Operating Lessor and the Initial Operating Lessee in
respect of the Aircraft.
"INITIAL OPERATING LESSEE" shall mean [ ](5).
"INITIAL OPERATING LESSOR" shall mean [the Lessee](6)[ Xxxxxxx Leasing
Corporation](7)[Xxxxxxx Leasing (Ireland) Limited](8) [#other#](9), a
[company/corporation] [incorporated/organized] under the laws of [ ].
"INITIAL STATE OF REGISTRATION" shall mean [ ](10)
"LEASE" shall mean the Lease and Credit Sale Agreement No. [ ] dated as of
the Borrowing Date between the Lessee and the Lessor.
"LEASE SUPPLEMENT" shall mean the Lease Supplement to the Lease dated the
Borrowing Date between the Lessor and the Lessee.
"LESSEE" shall have the meaning given to such term in the preliminary
statements to this Supplement.
----------
(4) For Aircraft msn 32359 and 32360 insert "Brazilian Aeronautical Registry";
For Aircraft msn 32361 and 32363 insert "Civil Aviation Authority of Turkey";
For Aircraft msn 32362 insert "Civil Aviation Authority of the Czech Republic";
and for all other Aircraft, insert as applicable.
(5) - For Aircraft 32359 and 32360 insert "Gol Transportes Aereos Ltda., a
Brazilian limited liability company"
- For Aircraft 32361 and 32363 insert "inter Ekspres Hava Tasimacilik A,S.
A Turkish [company]"
- For Aircraft msn 32362 insert Travel Servis a. s.
- For other Aircraft insert as agreed between GFC and Ex-Im Bank
(6) Insert for Aircraft msn 32361 and 32363, and as applicable for any other
Aircraft.
(7) Insert for Aircraft msn 32359 and 32360, and as applicable for any other
Aircraft.
(8) Insert for Aircraft msn 32362, and as applicable for any other Aircraft.
(9) Insert as applicable for any other Aircraft.
(10) For Aircraft msn 32359 and 32360 insert "Brazil"; For Aircraft msn 32361
and 32363 insert "Turkey";
For Aircraft msn 32362 insert "Czech Republic"; and for other Aircraft insert as
applicable.
2
"LESSEE CORPORATE REQUIREMENTS" shall have the meaning set forth in
Schedule 1 hereto.
"LESSOR" shall have the meaning given to such term in the preliminary
statements to this Supplement.
"LESSOR CORPORATE REQUIREMENTS" shall have the meaning set forth in
Schedule 1 hereto.
"LOCAL MORTGAGE" shall mean the [supplement to the Aircraft Mortgage dated
as of the Borrowing Date between the Lessor, Lessee and the Security
Trustee](11),.
"LOCAL TAXES" shall have the meaning set forth in Schedule 1 hereto.
"OPERATING LESSOR SECURITY ASSIGNMENT" shall mean the Operating Lessor
Security Agreement dated as of the Borrowing Date among the Initial Operating
Lessee and the Security Trustee.
["SUBLEASE" shall mean the Aircraft Lease Agreement dated as of [ ],
200[2/3] between the Lessee and Initial Operating Lessor in respect of the
Aircraft](12).
"UCC FINANCING STATEMENTS" shall mean collectively, UCC Financing
Statements covering (i) the Mortgaged Property (as defined in the Aircraft
Mortgage) by each of Lessor and Lessee, as debtor, and (ii) the Assigned
Property (as defined in the Operating Lessor Security Assignment) by Operating
Lessor as debtor, in each case, showing the Security Trustee as secured party,
for filing in each jurisdiction that the Security Trustee considers necessary.
(b) All other capitalized terms used in this Supplement and not otherwise
defined herein and all schedules to this Supplement have the respective meanings
set forth in Part I of Appendix A to the Participation Agreement.
(c) The rules of construction and interpretation for this Supplement and
all schedules to this Supplement shall be as set forth in Part II of Appendix A
to the Participation Agreement.
SECTION 3. Representations and Warranties of the Lessee. The Lessee hereby
represents and warrants to each of the parties to the Participation Agreement,
in relation to itself, as of the Borrowing Date (and each representation and
warranty shall survive the Borrowing Date), that:
----------
(11) Or as otherwise agreed between GFC and Ex-Im Bank, with reference to the
Jurisdictional Questionnaire for the Aircraft.
(12) Insert as applicable.
3
(a) Each of its representations and warranties set forth in Section
7 of the Participation Agreement is true and correct as of the Borrowing Date
with reference to facts and other circumstances prevailing as of the Borrowing
Date and on the basis that all references therein to the Signing Date shall be
deemed to be references to the Borrowing Date.
(b) Either (i) each of the Constituent Documents, board minutes,
actions of directors by written consent, incumbency certificates and specimen
signature certificates relating to it and delivered to Ex-Im Bank and the
Facility Agent with the certificates delivered pursuant to Sections 4A(b)(iii)
of the Participation Agreement, remains true and correct and in full force and
effect, and has not been amended or rescinded, or (ii) replacements thereof
which remain true, correct and in full force and effect, and which have not been
amended or rescinded, have been delivered to Ex-Im Bank and the Facility Agent.
(c) Except for the Lessee Perfection Mechanics and the Local Taxes,
if any, it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence in any Relevant Jurisdiction (relating to the
Aircraft) of the Operative Documents to which it [or the Initial Operating
Lessor] is or will become a party on such date that any of them or any other
instrument be filed, recorded, registered or enrolled in any court, public
office or elsewhere in any such Relevant Jurisdiction, except as expressly
provided herein, or that any stamp, registration or similar tax be paid in any
such Relevant Jurisdiction on or in relation to any of the Operative Documents
to which it is or will become a party on such date, each of which, if required,
shall be paid by it, and, no further action in any such Relevant Jurisdiction,
including any filing or recording of any document, is necessary or permissible
to establish and perfect (i) the Lessor's title to and interest in the Aircraft,
(ii) the Initial Operating Lessor's interest in the Aircraft and the Initial
Operating Lease, and (iii) the Security Trustee's first priority security
interest in the Aircraft, the Lease and the Initial Operating Lease, in each
case, as against the Lessor, the Lessee, the Initial Operating Lessor, the
Initial Operating Lessee and any third parties.
(d) The Liens granted by it in favor of the Security Trustee
pursuant to the terms of the Aircraft Security Documents constitute or will,
when executed, constitute valid, legal and binding security interests over the
relevant Collateral subject to such Liens and, assuming compliance with the
Lessee Perfection Mechanics, such Liens will have precedence over the claims of
any other creditor of it and, other than those expressly provided for hereunder
or under the other Operative Documents or those given preference by law, no
other consent or approval of, giving of notice to, registration with or taking
of any action in respect of, or by, any Government Body of any Relevant
Jurisdiction with respect to the Aircraft is required in order to perfect the
security interests of the Security Trustee in such Collateral.
(e) The Lessee shall comply with the Lessee Corporate Requirements
on or about the Borrowing Date.
4
(f) (i) payments to Lessor of Rent under the Lease will not be
subject to any withholding of any Taxes in any Relevant Jurisdiction relating to
the Lessee, and (ii) there are no Taxes imposed by any such Relevant
Jurisdiction or any agency or instrumentality thereof on or by virtue of the
execution or delivery of the Lease, other than the Local Taxes.
(g) There are no Liens on the Aircraft or the other Collateral the
subject of the Aircraft Security Documents other than Permitted Liens.
(h) Nothing herein or related to the transactions contemplated by
the Operative Documents requires, or makes advisable, the qualification by any
other party to the Participation Agreement for admission to do business under
the laws of the Initial State of Registration for the Aircraft or any other
Relevant Jurisdiction relating to the Aircraft, or any political subdivision
thereof, and the failure to so qualify does not adversely affect (i) the
exercise by any of the Lessor, Ex-Im Bank, the Facility Agent or the Security
Trustee of any right, privilege or remedy afforded to them in connection with
the Participation Agreement or the other Operative Documents or (ii) the
enforcement of any such right, privilege or remedy. The performance by each
party to the Participation Agreement of its obligations under, and the actions
required by the provisions of, the Participation Agreement and the other
Operative Documents, in each case in respect of the Aircraft or the Pledged
Securities, and any enforcement of any such provisions, will not result in any
Tax liability or other unfavorable consequences to such party pursuant to any
law, ordinance, decree or regulation of the State of Registration of the
Aircraft or any other Relevant Jurisdiction relating to the Aircraft or the
Pledged Securities or of any agency, department or instrumentality of any
thereof.
(i) It is authorized to hold Dollars to service its Indebtedness
under the Operative Documents.
(j) Its principal place of business is located in its jurisdiction
of organization and, for the purposes of Section 307 of Article 9 of the Uniform
Commercial Code, it is located in [the District of Columbia](13) [Delaware](14).
(k) It has not paid or agreed to pay and covenants that it will not
pay or agree to pay to any person any commission, fee or other payment in
connection with the purchase or acquisition of the Aircraft by Lessor or such
establishment or operation of the applicable Loan except for (i) amounts payable
pursuant to the provisions of the Operative Documents or (ii) reasonable
compensation for bona fide professional, technical or other comparable services.
(l) It has filed all returns in respect of Taxes required by
Applicable Laws of each Relevant Jurisdiction relating to it to be filed by it
and has paid all Taxes imposed upon it or any of its properties, assets, income
or franchises under such Applicable Laws which are due and payable, except to
the extent that such Taxes are
----------
(l3) Insert for each Lessee Party other than Xxxxxxx Leasing Corporation.
(14) Insert for Xxxxxxx Leasing Corporation.
5
being contested in good faith and for the payment of which adequate reserves
have been provided.
(m) No action or proceeding shall have been instituted or threatened
before any Government Body, nor shall any order, judgment or decree have been
issued or, to the best of its knowledge and belief, proposed to be issued by any
Government Body, on or prior to such date which might (i) set aside, restrain,
enjoin or prevent the completion, consummation, performance or observance of the
Aircraft Financing Documents for the Aircraft or any transactions contemplated
thereby, or (ii) in any other manner question the validity, binding effect or
enforceability of any of the Operative Documents.
SECTION 4. Representations and Warranties of the Lessor. The Lessor hereby
represents and warrants to each of the parties to the Participation Agreement,
in relation to itself, as of the Borrowing Date (and each representation and
warranty shall survive the Borrowing Date), that:
(a) Each of its representations and warranties set forth in Section
9 of the Participation Agreement is true and correct as of the Borrowing Date
with reference to facts and other circumstances prevailing as of the Borrowing
Date and on the basis that all references therein to the Signing Date shall be
deemed to be references to the Borrowing Date.
(b) It has such title to the Aircraft as was conveyed to it by the
[Manufacturer / Bridge Owner](15) on the date hereof free from any Lessor Liens.
(c) It has not conveyed, transferred, pledged, mortgaged, or
otherwise disposed of title to or any interest in any Aircraft or any Operative
Document or any of its other properties or subjected any Aircraft or any
Operative Document or any interest therein or any of its other properties to any
Lien other than (in any case) as expressly permitted under the Operative
Documents.
(d) It has not taken, and agrees for the benefit of the Secured
Parties and GFC that it will not take, any action to terminate the Lease for the
Aircraft without the consent of the Instructing Group.
(e) Under the Applicable Laws of any Relevant Jurisdiction relating
to it, or any political subdivision or taxing authority thereof, there exists no
Tax, levy, deduction, charge or withholding on or in connection with the
execution or delivery of the Operative Documents relating to the Aircraft to
which it is a party or any other document to be furnished thereunder or on any
payment to be made to the Lenders, the Facility Agent, the Security Trustee or
Ex-Im Bank under such Operative Documents, other than Local Taxes.
(f) It has not paid or agreed to pay and covenants that it will not
pay or agree to pay to any person any commission, fee or other payment in
connection with
----------
(15) Insert as appropriate.
6
the purchase or acquisition of the Aircraft or the establishment or operation of
the applicable Loan except for (i) amounts payable pursuant to the provisions of
the Operative Documents or (ii) reasonable compensation for bona fide
professional, technical or other comparable services.
(g) The Liens granted by it in favor of the Security Trustee
pursuant to the terms of the Security Documents relating to the Aircraft to be
entered into by it on or prior to the Borrowing Date constitute or will, when
executed, constitute valid, legal and binding security interests over the
Collateral subject to such Liens and, assuming compliance with the Lessor
Perfection Mechanics, such Liens will have precedence over the claims of it,
Lessee, Initial Operating Lessor, the Initial Lessor Parent or Initial Lessee
Parent, as applicable, or any other creditor of such Persons, as applicable,
and, other than those expressly provided for hereunder or under the other
Operative Documents or given preference by law, no other consent or approval of,
giving of notice to, registration with or taking of any action in respect of, or
by, any Government Body of any Relevant Jurisdiction relating to the Aircraft is
required in order to perfect the security interests of the Security Trustee in
the Collateral.
SECTION 5. Representations and Warranties of GFC. GFC hereby represents
and warrants to each of the parties to the Participation Agreement, in relation
to itself, as of the Borrowing Date (and each representation and warranty shall
survive the Borrowing Date), that:
(a) Each of the representations and warranties set forth in Section
9 of the GATX Guarantee is true and correct with respect to each Guarantor as of
the Borrowing Date with reference to facts and other circumstances prevailing as
of the Borrowing Date and on the basis that all references therein to the
Signing Date shall be deemed to be references to the Borrowing Date.
(b) Each of the representations and warranties of the Lessee set
forth in Section 3 is true and correct.
(c) No Lease Default relating to the Aircraft or any Other Aircraft
shall have occurred which is continuing or would arise from the consummation of
the transactions contemplated by the Aircraft Financing Documents relating to
the Aircraft.
(d) The Initial Operating Lease is in full force and effect, and
neither the Operating Lessor nor, to the best of GFC's knowledge, the Initial
Operating Lessee, has taken any action to, or intends, to terminate such Initial
Operating Lease.
(e) To the best of its knowledge, information and belief, no
Material Operating Lease Default with respect to the Aircraft, and no Event of
Loss in respect of the Aircraft (and no event that with the giving of notice or
the passing of time or both would constitute an Event of Loss in respect of the
Aircraft), shall have occurred which is continuing or would arise from the
consummation of the transactions contemplated by the Aircraft Financing
Documents for the Aircraft.
7
(f) No action or proceeding has been instituted or, to its
knowledge, after due inquiry, threatened, before any Government Body in any
Relevant Jurisdiction referable to the Aircraft, and no order, judgment or
decree has been issued or, to the best of its knowledge and belief, proposed to
be issued by any such Government Body which might (i) set aside, restrain,
enjoin or prevent the completion, consummation, performance or observance of the
Aircraft Financing Documents for the Aircraft or any transactions contemplated
thereby, (ii) materially adversely affect the financial condition of either
Guarantor or the business, operations, assets or prospects of either Guarantor,
or (iii) in any other manner question the validity, binding effect or
enforceability of any of the Operative Documents, other than [ ](16).
(g) Neither the Purchase Agreement nor the Lease for the Aircraft
has been rescinded by either party thereto (with respect to the Manufacturer, to
Lessee's knowledge), and each is free from any breach or default on the part of
Lessee and Original Purchaser.
(h) The Lessor shall comply with the Lessor Corporate Requirements
on or about the Borrowing Date.
(i) [Except for (i) the taking of possession by the Security Trustee
of the original certificates in respect of the Pledged Securities and (ii)
registration of releases of the Bridge Security and (iii) the filing of the UCC
financing statements referred to in Section 4A(b)(xii) of the Participation
Agreement, it is not necessary or advisable to ensure the legality, validity,
enforceability or admissibility in evidence of the Initial Lessee Share Pledge
Agreements or the Initial Lessor Share Pledge Agreement or to establish and
perfect, under the laws of any Relevant Jurisdiction (relating to the Initial
Lessee Parties, the Initial Lessee Parent or the Initial Lessor Parent) the
Security Trustee's first priority security interest in the Pledged Securities
against third parties including trustees, custodians and other representatives
or similar officials, under any bankruptcy or liquidation law or regulations
that any other instrument be filed, recorded, registered or enrolled in any
court, public office or elsewhere in any such Relevant Jurisdiction or that any
stamp, registration or similar fees be paid in any Relevant Jurisdiction in
relation to such documents, except for Local Taxes, if any.
(j) The Liens granted by each of Initial Lessor Parent and the
Initial Lessee Parent in favor of the Security Trustee pursuant to the terms of
the Initial Lessor Parent Share Pledge and the Initial Lessee Share Pledge
Agreements, respectively to be entered into on or prior to the first Borrowing
Date constitute or will, when executed, constitute valid, legal and binding
security interests over the relevant Collateral subject to such Liens and,
assuming compliance with the requirements referred to in clause (h) above, such
Liens will have precedence over the claims of Initial Lessor Parent and Initial
Lessee Parent, as applicable, or any other creditor of such Persons, as
applicable, and, other than those expressly provided for hereunder or under the
other Operative Documents or those given preference by law, no other consent or
approval of, giving of notice to, registration with or taking of any action in
respect of, or by, any Government
----------
(16) Insert as agreed between GFC and Ex-Im Bank,
8
Body of any Relevant Jurisdiction referred to in Section 5(i) hereof is required
in order to perfect the security interests of the Security Trustee in such
Collateral.](17)
(k) The conditions precedent to the performance of it's and Lessee's
obligations in respect of the transactions contemplated to occur on the
Borrowing Date under the Aircraft Financing Documents for the Aircraft shall
have been (or, simultaneously with the drawdown of the Loan relating to the
Aircraft and the commencement of the leasing of the Aircraft pursuant to the
Lease will be) satisfied or waived on terms acceptable to it.
SECTION 6. Representations and Warranties of the Security Trustee. The
Security Trustee represents and warrants that the representations and warranties
set forth in Section 9(f) of the Participation Agreement are true and correct on
and as of the Borrowing Date with reference to facts and other circumstances
prevailing as of the Borrowing Date, except to the extent that such
representations and warranties shall relate solely to an earlier date (in which
case such representations and warranties shall be true and accurate on and as of
such earlier date).
SECTION 7. Miscellaneous. The Participation Agreement shall remain
unchanged (except as supplemented hereby), and in full force and effect.
SECTION 8. Governing Law. This Supplement shall in all respects be
governed by the law of the State of New York.
----------
(17) Insert for the first Borrowing Date only.
9
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed as of the day and year first above written.
LESSOR
[ ________________________]
By:________________________
Name:______________________
Title:_____________________
LESSEE
[ ________________________]
By:________________________
Name:______________________
Title:_____________________
SECURITY TRUSTEE
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in
its individual capacity but
solely as Security Trustee
By:________________________
Name:______________________
Title:_____________________
GUARANTOR
GATX FINANCIAL CORPORATION
By:________________________
Name:______________________
Title:_____________________
10
SCHEDULE 1
to Borrowing Date Supplement No.[ ]
AIRCRAFT FINANCING PARTICULARS
1. "LESSEE CORPORATE REQUIREMENTS" shall mean as follows:
[(a) The Lessee must enter particulars of the Aircraft Security Documents
to which it is a party in its Register of Mortgages and Charges to
comply with Section 54 of the Companies Law (2001 Second Revision)
of the Cayman Islands.](18)
[(b). #Include if applicable#].
2. "LESSEE PERFECTION MECHANICS" shall mean as follows:
(a) The placing on the Airframe and Engines referable to the Aircraft of
the nameplates referred to in Section 8D(a)(i)(A) of the
Participation Agreement;
(b) The taking of possession by the Security Trustee of the chattel
paper original of the Lease and the Lease Supplement;
(c) The filing of the UCC Financing Statements as contemplated in
Section 4B(c)(xii) of the Participation Agreement;
(d) The Lessee Corporate Requirements, if any;
(e) [The issuance by the Civil Aviation Authority of the Certificate of
Registration for the Aircraft];
(f) [The filing and registration with the Civil Aviation Authority of
the Initial Operating Lease, the Local Mortgage and the Operating
Lessor Security Assignment](l9)
(g) [The filing and registration with the Civil Aviation Authority of
the Initial Operating Lease and the Local Mortgage and the filing
with the Turkish Treasury of the Operating Lessor Security
Assignment](20)
(h) [The filing and registration with the Civil Aviation Authority of
the Initial Operating Lease and the Local Mortgage](21)
----------
(18) Insert for Cayman Lessee Parties
(19) Insert for Aircraft msn 32359 and 32360.
(20) Insert for Aircraft msn 32361 and 32363
(21) Insert for Aircraft msn 32362.
11
(i) [#insert as agreed between GFC and Ex-Im Bank#]
3. "LOCAL TAXES" shall mean as follows:
(a) [Cayman Islands stamp duty will be payable if any of the Operative
Documents are executed in, brought to, or produced before a court of
the Cayman Islands, although such duty would be nominal except in
the case of (A) a legal or equitable mortgage or charge of immovable
property or a debenture (1) where the sum secured is CI$300,000
(US$360,000) or less, in which case such duty would be 1% of the sum
secured; (2) where the sum secured is more than CI$300,000
(US$360,000), whether initially or after further advance, in which
case such duty would be 1.5% of the sum secured; (B) a legal or
equitable mortgage or charge of movable property (not including a
debenture but including a xxxx of sale), in which case such duty
would be 1.5% of the sum secured; (C) that in the case of a Note
duty of CI$0.25 per CI$100 or part thereof of the face value of each
note, subject to a maximum of CI$250, is payable, unless, the Lessor
paid a duty of CI$500 in respect of the instrument creating the
Notes thereafter no further stamp duty in respect of such Notes
would be payable, provided further, that no duty shall be payable
where the property is situated outside the Cayman Islands and that
in the case of a legal or equitable mortgage or charge granted by an
exempted company, an ordinary non-resident company (as defined in
the Companies Law (2001 Second Revision) or an exempted trust (as
defined in the Trusts Law 2001 Revision) or a body corporate
incorporated outside the Cayman Islands of movable property situated
in the Cayman Islands or over shares in such exempted company (which
would include the Lessee, Lessor and Borrower) or an ordinary
non-resident company, the maximum duty payable shall be CI$500.00
(US$600.00).](22)
[(b) #Include if applicable#].
4. "LESSOR CORPORATE REQUIREMENTS" shall mean as follows:
(a) [that the Lessor must enter particulars of the Aircraft Security
Documents to which it is a party in its Register of Mortgages and
Charges to comply with Section 54 of the Companies Law (2001 Second
Revision) of the Cayman Islands](23)
5. "AIRCRAFT SECURITY DOCUMENTS" shall mean as each of the following
documents:
----------
(22) Insert for Cayman Lessee No.l, Cayman Lessee No.2 or Initial Lessor Party.
(23) Insert for Cayman Lessors.
12
(a) [Aircraft Mortgage,
(b) Local Mortgage;
(c) Operating Lease Credit Documents;
(d) Assignment of Insurances;
(e) Assignment of Reinsurances; and
(f) Notices and Acknowledgements of Assignment.
13
APPENDIX A
Relating to Ten (10) Boeing Model 737-800 Aircraft
Ex-Im Bank Guarantee No. AP077971XX - United States - GATX
MILBANK, TWEED, XXXXXX & XxXXXX LLP
APPENDIX A
DEFINITIONS AND CONSTRUCTION
I. Definitions. Unless the context otherwise requires, the following terms
shall have the following meanings.
"ACCEPTABLE PERSON" shall mean a Person that meets the requirements set
forth in Section 6(b) of the Participation Agreement.
"ACCEPTANCE CERTIFICATE" shall mean, in respect of an Aircraft, a
certificate of acceptance executed by the Initial Operating Lessee for such
Aircraft and dated the date of commencement of the leasing of such aircraft
pursuant to the Initial Operating Lease for such Aircraft.
"ACCESSION CERTIFICATE" shall mean a certificate in the form set forth in
Exhibit B of the Participation Agreement signed by a Lender and the other
Persons party thereto in order to confirm any assignment or transfer by a Lender
of rights and obligations under the Operative Documents.
"ACCOUNT COLLATERAL" shall mean all right of each Borrower in and to,
collectively, the Security Account and all cash, investment property, Permitted
Investments, other investments, securities, instruments or other property
(including all "financial assets" within the meaning of Section 8-102(a)(9) of
the UCC) at any time or from time to time credited to the Security Account.
"ACT" shall mean Subtitle VII, Title 49 of the United States Code, as
amended from time to time, and the regulations promulgated thereunder.
"ADDITIONAL INSUREDS" shall mean, in respect of an Aircraft, the Secured
Parties, the relevant Lessee, the relevant Borrower, the Guarantors and their
respective officers, directors, servants, agents and employees and the
successors and assigns of each of the foregoing.
"ADDITIONAL RENTAL AMOUNT" shall mean, in respect of an Aircraft and each
Basic Rent Payment Date referable to the Note related thereto, an amount in
Dollars equal to the amount of accrued and unpaid interest expressed to be due
and payable under such Note on such Basic Rent Payment Date.
"AFFILIATE" of any Person shall mean any other Person directly or
indirectly controlling, directly or indirectly controlled by, or under direct or
indirect common control with, such Person; or if such Person is a partnership,
any general partner of such Person or a Person controlling such general partner.
For purposes of this definition, "control" (including "controlled by" and "under
common control with") shall mean the power, directly or indirectly, to direct or
cause the direction of the management and policies of such Person whether
through the ownership of voting securities or by contract or otherwise.
"AFTER TAX BASIS" shall mean, with respect to any payment to be made under
any Operative Document, an amount that, after deduction of the Taxes payable by
the recipient of
[Appendix A]
such payment on such payment or as a result of the receipt or accrual of such
amount by such recipient, is equal to the payment due.
"AIRCRAFT" shall mean, collectively, each Airframe and, individually, any
Airframe, in either case, together with the related Engines, whether or not any
of such Engines may from time to time be installed on an Airframe or on any
other airframe and, where the context permits, references to "Aircraft" shall
include the Manuals and Technical Records for the Aircraft. With respect to each
Lease, "Aircraft" shall mean the Airframe, together with the related Engines set
forth in the Lease Supplement relating to each such Lease.
"AIRCRAFT AGREED VALUE" shall mean, in respect of any Aircraft and at any
time when any Floating Rate Note relating to such Aircraft is outstanding, the
amount in Dollars equal to one hundred and fifteen per cent. (115%) of the
outstanding principal amount of such Note at such time or (b) at any time when
any Fixed Rate Note relating to such Aircraft is outstanding, the amount in
Dollars equal to one hundred and twenty per cent. (120%) of the outstanding
principal amount of such Note at such time.
"AIRCRAFT FINANCING DOCUMENTS" shall mean, collectively, in respect of the
financing of an Aircraft pursuant to the Participation Agreement, each of the:
(a) Request for Disbursement;
(b) Request for Guarantee Legend;
(c) Note;
(d) GATX Guarantee Confirmation;
(e) Borrowing Date Supplement;
(f) Lease;
(g) Lease Supplement;
(h) Sublease (if any);
(i) Initial Operating Lease;
(j) any other Operating Lease;
(k) Purchase Agreement;
(l) Purchase Agreement Assignment (if any);
(m) Airframe Warranties Agreement
(n) Engine Warranties Agreement;
(o) Manufacturer Consent and Agreement (if any);
(p) Aircraft Sale Agreement (if any);
(q) Bills of Sale;
(r) BFE Xxxx of Sale;
(s) Powers of Attorney;
(t) Aircraft Security Documents;
(u) Designation Letters (if any); and
(v) Substitution Supplements (if any).
each as, and to the extent that, such document relates to such Aircraft.
"AIRCRAFT MORTGAGE" shall mean, with respect to an Aircraft, the first
priority aircraft mortgage and security agreement for such Aircraft dated the
Borrowing Date for such Aircraft, entered into by the Initial Lessor for such
Aircraft, the Initial Lessee for such Aircraft and the
2
[Appendix A]
Security Trustee, substantially in the form of the "Form of First Priority
Mortgage and Security Agreement" initialed on the Signing Date for the purposes
of identification by Milbank, Tweed, Xxxxxx & XxXxxx LLP and Xxxxxxxx Chance
LLP.
"AIRCRAFT PROCEEDS" shall mean, with respect to an Aircraft, any and all
amounts received or receivable by the Security Trustee in respect of the
enforcement or exercise of any claim, right or remedy in respect of or in
connection with the related Collateral which arises from the sale, lease, hire
or other disposition of such Aircraft and all other amounts received or
receivable by the Security Trustee in respect of the enforcement or exercise of
any claim, right or remedy in respect of or in connection with such Collateral
(other than Insurance Proceeds and Requisition Compensation).
"AIRCRAFT SALE AGREEMENT" shall mean, with respect to any Delivered
Aircraft, the aircraft sale agreement, dated on or prior to the Borrowing Date
for such Aircraft, between relevant Bridge Owner, as seller, and the Initial
Lessor, as buyer, in relation to such Aircraft.
"AIRCRAFT SECURITY DOCUMENTS" shall mean, collectively, in respect of an
Aircraft, each of the following which relates to such Aircraft:
(a) Aircraft Mortgage;
(b) Local Mortgage (if any);
(c) Operating Lessor Security Assignment;
(d) Operating Lease Credit Documents;
(e) Assignment of Insurances (if any);
(f) Assignment of Reinsurances (if any); and
(g) Notices and Acknowledgements of Assignment.
"AIRCRAFT STATUS INFORMATION" shall mean, in respect of an Aircraft and as
of any date, the following information regarding such Aircraft determined as of
any day not more than sixty (60) days prior to such date:
(a) in respect of the Airframe comprising part of such Aircraft, the
time until (i) the next Major Check (as defined in the Model Form Operating
Lease) of such Airframe and (ii) the next C-Check (as defined in the Model Form
Operating Lease) of such Airframe and the type of such next C-Check (eg 1C, 2C
and 3C, etc);
(b) in respect of each Engine comprising part of such Aircraft, the
status of the life limited parts and time controlled components in such Engine
(being cycles or flight hours remaining, as appropriate) and the flight hours
recorded by such Engine from the time of the most recent performance restoration
of the modules in such Engine;
(c) in respect of the auxiliary power unit comprising part of such
Aircraft, the time elapsed from the time of the most recent performance
restoration and full gas path overhaul thereof;
(d) in respect of the landing gear comprising part of such Aircraft,
the time until the next scheduled replacement thereof; and
3
[Appendix A]
(e) any accident or incident involving such Aircraft and any other
matter specifically requested by the Approved Valuer,
"AIRFRAME" shall mean, collectively, each of the ten (10) Boeing Model
737-800 airframes bearing manufacturer's serial number described in Schedule 1
to the Participation Agreement and, individually, any such airframe and any and
all Parts, so long as the same shall be incorporated or installed in or attached
to such Airframe or so long as title thereto shall remain vested in the relevant
Lessor in accordance with the terms of Section 8 of the applicable Lease after
the removal from such Airframe.
"AIRFRAME WARRANTIES AGREEMENT" shall mean the airframe warranties
agreement dated on or around the Signing Date among the Original Purchaser, GFC,
the Security Trustee and the Manufacturer in relation to certain warranties in
relation to the Airframes.
"AIRWORTHINESS DIRECTIVE" or "AD" shall mean, with respect to an Aircraft,
any requirement for the inspection, repair or modification of such Aircraft, any
Engine or any Part as issued by any Civil Aviation Authority applicable to such
Aircraft and/or the FAA.
"APPLICABLE LAWS" shall mean all applicable laws, ordinances, judgments,
decrees, injunctions, writs, rules, regulations, orders, interpretations,
licenses, permits and orders of any court, arbitrator or Government Body in any
relevant jurisdiction.
"APPLICABLE RATE" shall mean, with respect to any Interest Period for a
Loan, (i) where such Loan is evidenced by a Floating Rate Note, the applicable
Floating Rate for such Interest Period or (ii) where such Loan is evidenced by a
Fixed Rate Note, the applicable Fixed Rate.
"APPRAISAL" shall mean, in respect of an Aircraft, the appraisal of such
Aircraft by an Approved Valuer as to the Appraised Value of such Aircraft.
"APPRAISED VALUE" shall mean, in respect of an Aircraft, as of any date of
determination, the appraised current fair market value of such Aircraft
determined by an Approved Valuer as of such date on the basis that (a) there
will be a sale between a willing buyer and a willing seller with neither party
being obliged to buy or sell and there being a reasonable period of time to
consider such transaction, (b) such Aircraft will be in "half-time" condition as
adjusted by the Approved Valuer to reflect the Aircraft Status Information and
assuming that usage of the Aircraft since the date of determination of the
Aircraft Status Information has continued on a basis substantially consistent
with its general usage as of such date of determination.
"APPROVED VALUER" shall mean, with respect to the Appraised Value of an
Aircraft, an independent aircraft valuer of international repute and a member of
the International Society of Transport Aircraft Trading (ISTAT) appointed by GFC
for such Aircraft and being such valuer as is selected by (a) the Instructing
Group, by notice in writing given to GFC, or (b) by GFC, in the event of the
Instructing Group failing to make any such selection within three (3) Business
Days of any request made by GFC for the Instructing Group to do so, from a list
of three (3)such valuers provided in writing by GFC to the Instructing Group.
4
[Appendix A]
"ASSIGNED PROPERTY" shall have, in respect of an Aircraft, the meaning
assigned thereto in Section 2 of the Operating Lessor Security Assignment for
such Aircraft.
"ASSIGNMENT OF INSURANCES" shall mean, in respect of an Aircraft, the
assignment of insurances, if any, between the Operating Lessee for such Aircraft
and the Operating Lessor for such Aircraft in relation to the Insurances (other
than liability insurances) effected by such Operating Lessee in connection with
such Aircraft pursuant to the requirements of the relevant Operating Lease.
"AUTHORIZED MAINTENANCE PERFORMER" shall mean, in relation to any
Airframe, any Engine or any Part, (a) for so long as the relevant Aircraft is
subject to an Operating Lease, a maintenance facility approved by the relevant
Operating Lessor from time to time under the relevant Operating Lease in
accordance with the Standard, and (b) during any period the relevant Aircraft is
Off-Lease, any maintenance provider or providers selected by GFC and certified
by the JAA under JAR Part 145 or approved by the FAA under FAR Part 145.
"AUTHORIZED PERSON" shall mean, as to any Borrower, any Borrower Party,
any Lessor, any Lessor Party, any Lessor Parent, any Lessee Parent, any Lessee,
any Lessee Party, the Original Purchaser or either Guarantor, any Person duly
authorized by such Borrower, Borrower Party, Lessor, Lessor Party, Lessor
Parent, Lessee Parent, Lessee, Lessee Party, the Original Purchaser or such
Guarantor to take the action required by the Operative Documents.
"AVAILABILITY PERIOD" shall mean, with respect to each Aircraft and the
Loan relating thereto, the period commencing on the Signing Date and terminating
on and including the Final Disbursement Date.
"BANKRUPTCY CODE" shall mean Chapter 11 of Title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq.
"BASIC RENT" shall mean, in respect of an Aircraft and any Basic Rent
Payment Date referable thereto, the aggregate of the Fixed Rental Amount and the
Additional Rental Amount expressed to be payable on such day pursuant to Section
3(b) of the Lease for such Aircraft.
"BASIC RENT PAYMENT DATES" shall mean, in respect of an Aircraft, each
Loan Payment Date in respect of the Loan relating to such Aircraft.
"BFE XXXX OF SALE" shall mean in respect of (a) Aircraft msn 32359, the
BFE xxxx of sale for such Aircraft executed by GFC in favor of the Cayman Lessee
Party No. 1, (b) each other Delivered Aircraft, the BFE bills of sale for such
Aircraft executed by (i) GFC in favor of the Manufacturer and (ii) the
Manufacturer in favor of the Bridge Owner of such Aircraft and (c) each
Remaining Aircraft, the BFE bills of sale for such Aircraft executed by (i) the
GFC in favor of the Manufacturer and (ii) the Manufacturer in favor of the
Initial Lessor, each dated as of the Delivery Date or, in the case of clause
(c)(ii) above, the Borrowing Date, for the applicable Aircraft.
"XXXX OF SALE" shall mean, in respect of an Aircraft, collectively (i) the
xxxx of sale for such Aircraft executed by the Manufacturer in favor of the
Manufacturer's Subsidiary dated the
5
[Appendix A]
Delivery Date for such Aircraft, (ii) the xxxx of sale executed by the
Manufacturer's Subsidiary in favor of, in the case of a Delivered Aircraft,
Bridge Owner for such Aircraft and, in the case of a Remaining Aircraft, the
Initial Lessor for such Aircraft, dated the Delivery Date for such Aircraft and
(iii) in the case of a Delivered Aircraft, the xxxx of sale for such Aircraft
executed by Bridge Owner for such Aircraft in favor of Initial Lessor for such
Aircraft, dated the Borrowing Date for such Aircraft.
"BORROWER" shall each mean, with respect to an Aircraft or Lease, Loan or
Note referable thereto, (a) as from the Borrowing Date with respect to such
Aircraft, the Initial Borrower with respect to such Aircraft, Lease, Loan and
Note and (b) thereafter from time to time any other Person that shall, in
accordance with the Operative Documents, have become and be the Borrower of such
Loan and under such Note.
"BORROWER COLLATERAL" shall mean the Pledged Securities pledged or charged
under each Lessor Parent Pledge Agreement and each Lessor's interest in any of
the property (other than Excluded Property) described in Granting Clauses 1
through XII of each Aircraft Mortgage to which such Lessor is a party.
"BORROWER INDEMNITY AGREEMENT" shall mean the borrower indemnity agreement
dated the Signing Date by and among the Facility Agent, the Initial Lender and
GFC.
"BORROWER PARTY" shall mean (a) the Initial Borrower Party and (b) each
other Person that shall have become a Borrower Party for the purposes of the
Operative Documents.
"BORROWER SECURITY DOCUMENTS" shall mean, collectively, each Lessor Share
Pledge Agreement, each Lessee Share Pledge Agreement and the GATX Guarantee.
"BORROWING DATE" shall mean, with respect to a Loan, the date designated
by GFC in a Notice of Borrowing as the date on which such Loan shall be made or,
as the context may require, the date such Loan is made under the Loan Agreement.
"BORROWING DATE SUPPLEMENT" shall mean, in respect of the Borrowing Date
for an Aircraft, the Borrowing Date Supplement in the form set forth in Schedule
E to the Participation Agreement with such changes thereto to reflect the
Applicable Law of the State of Registration for such Aircraft and any other
Relevant Jurisdiction as shall be acceptable to Ex-Im Bank in its absolute
discretion.
"BRIDGE LENDER" shall mean Barclays Bank PLC.
"BRIDGE OWNER" shall mean, in respect of (i) Aircraft msn 32359 and msn
32360, Cayman Lessee Party Xx.0, (xx) Xxxxxxxx xxx 00000, Cayman Lessee Party
No. 1 and (iii) any other Aircraft, the owner of such Aircraft (which owner
shall be a Lessee Party), if any, other than Manufacturer, immediately prior to
the sale of such Aircraft to a the relevant Initial Lessor on the Borrowing Date
for such Aircraft, as contemplated in the Participation Agreement.
"BRIDGE SECURITY" shall mean, in respect of an Aircraft, any Lien over the
Collateral granted by the Initial Lessee for such Aircraft or the Lessee Parent
of such Initial Lessee in favor of the Bridge Lender in respect of such Aircraft
or Initial Lessee.
6
[Appendix A]
"BUSINESS DAY" shall mean any day on which commercial banks are not
authorized or required to close in London, England or New York, New York and
which is also a day on which dealings in Dollar deposits are carried out in the
London interbank market.
"CAPE TOWN CONVENTION" shall mean, collectively, the Convention on
International Interests in Mobile Equipment and the Protocol to the Convention
on International Interests in Mobile Equipment on matters specific to Aircraft
Equipment dated November 16, 2001.
"CAYMAN LESSEE PARTY NO. 1" shall mean Xxxxxxx Leasing Limited, a limited
liability company duly incorporated under the laws of the Cayman Islands.
"CAYMAN LESSEE PARTY No. 2" shall mean Xxxxx Leasing Limited, a limited
liability company duly incorporated under the laws of the Cayman Islands.
"CERTIFICATE OF AIRWORTHINESS" shall mean, in respect of an Aircraft, the
certificate of airworthiness issued by the Civil Aviation Authority from time to
time with respect to such Aircraft.
"CERTIFICATE OF REGISTRATION" shall mean, in respect of an Aircraft, the
certificate of aircraft registration issued by the Civil Aviation Authority from
time to time with respect to such Aircraft.
"CHARGED PROPERTY" shall mean, in respect of any Lessee, Lessor or
Borrower, as the case may be, all of such Person's right, title and interest in,
to, under or derived from the undertaking of it and all its assets both present
and future and wherever situate, and whether real or personal, including the
uncalled capital and any uncalled premiums and any called but unpaid capital or
premiums of it, excluding the Mortgaged Property and the Excluded Property.
"CIVIL AVIATION AUTHORITY" shall mean, in respect of an Aircraft, each
Government Body or other Person who shall from time to time be vested with the
control and supervision of, or have jurisdiction over, the registration,
airworthiness and operation of aircraft or other matters relating to civil
aviation in the State of Registration of such Aircraft.
"CLAIMS" shall have the meaning set forth in Section 10(a) of the
Participation Agreement.
"COLLATERAL" shall mean, collectively, (i) all property subject to the
Lien of the Security Documents and (ii) the Account Collateral.
"COMMITMENT" shall have the meaning set forth in Section 2.1 of the Loan
Agreement.
"COMPULSORY ACQUISITION" shall mean, in respect of an Aircraft,
requisition of title or other compulsory acquisition, requisition,
appropriation, expropriation, deprivation or confiscation for any reason of such
Aircraft or any portion thereof by the State of Registration for such Aircraft
or other competent authority (whether de jure or de facto) but shall exclude
requisition for use or hire not involving requisition of title of such Aircraft
or any portion thereof.
7
[Appendix A]
"CONSTITUENT DOCUMENTS" shall mean, in respect of any Person,
collectively, the certificate of incorporation or formation, the by-laws,
memorandum and articles of association or other like documents relating to such
Person, in each case, as in effect from time to time.
"CONVERSION" shall mean the conversion of interest payable on a Loan (and
the Note evidencing such Loan) to a fixed rate of interest from a floating rate
of interest as contemplated by a Conversion Notice delivered pursuant to Section
3.4(a) of the Loan Agreement.
"CONVERSION DATE" shall mean (i) with respect to any Loan prior to a
Conversion of such Loan, the date set forth as such in the relevant Conversion
Notice as the Conversion Date for such Loan, and (ii) with respect to any Loan
on and after a Conversion in respect thereof, the date of such Conversion.
"CONVERSION NOTICE" shall have the meaning set forth in Section 3.4(a) of
the Loan Agreement.
"CORPORATE SERVICES AGREEMENT" shall mean, in respect of the Initial
Borrower Party, that certain corporate services agreement dated as of the
Signing Date among Walkers SPV, Initial Lessor Parent, Initial Borrower Party,
Security Trustee and GFC relating to the administration of the Initial Borrower
Party and, in respect of any other Borrower Party or Lessor Party, such other
agreement relating to the administration of such Initial Borrower Party
reasonably acceptable to the Instructing Group.
"CREDIT" shall have the meaning set forth in the recitals to the Loan
Agreement.
"CVPRIOT LESSEE PARTY" shall mean Xxxxxxx Leasing (Cyprus) Limited, a
limited liability company duly incorporated under the laws of the Republic of
Cyprus.
"DECLARATION OF TRUST" shall mean, in respect of the Initial Borrower
Party, the declaration of trust dated April 15,2002 by Walkers SPV in respect of
the USEB Aircraft Trust (the "INITIAL DECLARATION OF TRUST") and, in the case of
any other Borrower Party, such declaration of trust entered into in connection
with such other Borrower Party.
"DEFAULT" shall mean a Lease Default or Loan Default.
"DEFAULT EVENT" shall have the meaning set forth in Section 13(d)(i) of
the Participation Agreement.
"DELAWARE LESSEE PARTY" shall mean Xxxxxxx Leasing Corporation, a Delaware
corporation.
"DELIVERED AIRCRAFT" shall mean each Aircraft for which the Delivery Date
occurs prior to the Borrowing Date for the Loan relating to such Aircraft.
"DELIVERY" shall mean, in respect of an Aircraft, the time when Bridge
Owner or the Initial Lessor for such Aircraft, as the case may be, accepted, or
shall accept, delivery of such Aircraft from the Manufacturer under the Purchase
Agreement and the applicable Purchase Agreement Assignment.
8
[Appendix A]
"DELIVERY DATE" shall mean, with respect to an Aircraft, the date on which
the Delivery for such Aircraft occurs.
"DESIGNATED ACCOUNT" shall mean (i) in the case of Delivered Aircraft or
amounts payable to GFC or any Lessee, the account of GFC bearing account number
3750878673 with Bank of America, Dallas, Texas 75202-2911 (ABA number 000000000)
or such other account as may from time to time be designated by notice in
writing given by GFC to the Facility Agent and (ii) in the case of the
disbursement of the proceeds of the Loan relating to any Remaining Aircraft, the
account agreed between the Facility Agent, GFC and Ex-Im Bank.
"DESIGNATED PERCENTAGE" shall mean, as to each Lender, the percentage set
forth opposite such Lender's signature in the Loan Agreement.
"DESIGNATION" shall have the meaning set forth in Section 6(a) of the
Participation Agreement.
"DESIGNATION DATE" shall have the meaning set forth in Section 6(c) of the
Participation Agreement.
"DESIGNATION LETTER" shall have the meaning set forth in Section 6A(a) of
the Participation Agreement.
"DISBURSEMENT" shall mean, in respect of an Aircraft, the amount of funds
disbursed by a Lender with respect to the financing of such Aircraft pursuant to
the Loan Agreement and the Participation Agreement.
"DISCLOSURE LETTER" shall mean any letter dated the Signing Date or a
Borrowing Date from GFC to the Security Trustee in relation to Section 9 of the
GATX Guarantee or Section 5 of the Borrowing Date Supplement referable to such
Borrowing Date.
"DOLLARS", "U.S. DOLLARS". "U.S.$", "US$" and "$" shall mean immediately
available and freely transferable lawful currency of the United States from time
to time.
"ELIGIBLE OPERATING LESSEE" shall mean any aircraft operator that, at the
time of determination, (a) does not have its principal office, and is not
otherwise based, in an Excluded Country or a Restricted Country, (b) is
authorized under Applicable Law to operate aircraft of the same type as the
Aircraft, and (c) does not have a liquidator, trustee, receiver, administrator,
or similar officer appointed to it or the whole or a substantial part of its
business, assets or revenues and is not subject to any insolvency,
reorganization, bankruptcy or similar proceedings.
"ENGINE" shall mean, in respect to an Aircraft, (i) each of the two (2)
CFM Model CFM56-7B27 engines bearing manufacturer's serial numbers set forth in
the Lease Supplement related to such Aircraft, whether or not from time to time
installed on the related Airframe or any other airframe or any replacement for
any such named engine subjected to the Lease for such Aircraft pursuant to any
lease supplements executed by the Lessee and Lessor of such Aircraft, (ii) any
Replacement Engine therefor and (iii) any other engine that may from time to
time be installed on the related Airframe that is or becomes the property of the
Lessor for such Aircraft or any engine that having been removed from such
Airframe remains the property of such
9
[Appendix A]
Lessor, in each case pursuant to such Lease, together with all Parts from time
to time belonging to, installed in or appurtenant to any such engine but
excluding any engine which has been replaced with a Replacement Engine in
accordance with such Lease.
"ENGINE MANUFACTURER" shall mean CFM International, Inc., a Delaware
corporation.
"ENGINE WARRANTIES AGREEMENT" shall mean, in respect of all the Aircraft,
the engine warranty agreement dated as of the Signing Date between GFC, the
Security Trustee and Engine Manufacturer in relation to certain warranties in
relation to the Engines for such Aircraft.
"EVENT OF DEFAULT" shall mean a Lease Event of Default or a Loan Event of
Default.
"EVENT OF LOSS" shall mean, with respect to an Aircraft, an Airframe or
any related Engine thereto, any of the following events:
(a) the loss of such property or the use thereof due to the destruction of
or damage to such property that renders repair uneconomic or that renders such
property permanently unfit for normal use;
(b) any damage or loss to or other circumstance in respect of such
property that results in an insurance settlement with respect to such property
on the basis of a total loss, or a constructive or arranged total loss;
(c) the confiscation or nationalization of, or requisition of title to,
such property by any Government Body;
(d) the theft or disappearance of such property that shall have resulted
in the loss of possession of such property by Lessee or any Operating Lessee of
such Aircraft for a period in excess of the lesser of one hundred twenty (120)
consecutive days and the balance of the Term for such Aircraft,
(e) the seizure of, or requisition for use of, such property by any
Government Body that shall have resulted in the loss of possession of such
property by such Lessee or any such Operating Lessee and such requisition for
use shall have continued beyond the earlier of (A) the lesser of the balance of
the Term for such Aircraft and one hundred eighty (180) consecutive days and (B)
the date of receipt of insurance or condemnation proceeds with respect thereto;
(f) as a result of any rule, regulation, order or other action by any
Government Body or court having jurisdiction, the use of such property in the
normal conduct of such Lessee's or GFC's overall business shall have been
prohibited for a period of at least six (6) consecutive months or the balance of
the Term for such Aircraft (whichever is shorter) unless such Lessee (or GFC on
its behalf), prior to the expiration of such period, shall have undertaken and
shall be diligently carrying forward all steps which, in its reasonable
judgment, are necessary or desirable to permit the use of such property by
Lessee (or GFC on its behalf) and the prohibition against such use of such
property shall have been removed within twelve (12) months of the effectiveness
of such rule, regulation, order or other action or by the end of the relevant
Term (if earlier); or
10
[Appendix A]
(g) any "Event of Loss" under such Operating Lease and the receipt by the
Operating Lessor thereunder, GFC or the Security Trustee of payment by the
Operating Lessee with respect thereto. An Event of Loss with respect to an
Aircraft shall be deemed to have occurred if an Event of Loss occurs with
respect to the Airframe for such Aircraft.
For purposes of the Operative Documents, an Event of Loss in respect of an
Aircraft shall be deemed to have occurred:
(1) in the case of an actual total loss, at 12:00 midnight (London
time) on the actual date such Aircraft was lost or, if such date is not known,
12:00 midnight (London time) on the day on which such Aircraft was last heard
from;
(2) in the case of any of the events described in paragraph (i) of
the definition of Event of Loss above (other than an actual total loss), upon
the date of occurrence of such destruction, damage or rendering unfit;
(3) in the case of any of the events described in paragraph (ii) of
the definition of Event of Loss above (other than an actual total loss), upon
the date that notice claiming the loss of such Aircraft is given to the relevant
insurers, unless the insurers do not forthwith admit such claim, then at the
date and time at which either a total loss is subsequently admitted by the
insurers or a competent court or arbitration tribunal issues a judgment to the
effect that a total loss has occurred; and
(4) in the case of any of the events referred to in paragraphs (c),
(d), (e) and (f) of the definition of Event of Loss above, upon the occurrence
thereof.
"EXCLUDED COUNTRY" shall mean any of: (i) Iraq (for so long as The United
Nations Security Council Resolution 670 of 1990 on Iraq and Kuwait or any
similar order or resolution remains in effect), (ii) Libya (for so long as The
United Nations Security Council Resolution 748 of March 31, 1992 or any similar
order or resolution remains in effect), and (iii) any country which may from
time to time be the subject of any similar order or resolution.
"EXCLUDED PROPERTY" shall mean, in respect of an Aircraft, (i) proceeds of
public liability insurance paid or payable as a result of insurance claims made,
or losses suffered, by each of the Lessor and the Lessee for such Aircraft that
are payable directly to for its own account, (ii) proceeds of insurance
maintained with respect to the Aircraft by GFC or any Affiliate thereof for its
or their own account or benefit (whether directly or through such Lessee), (iii)
the proceeds of the Note for such Aircraft, (iv) any interest that pursuant to
the Operative Documents may from time to time accrue in respect of any of the
amounts described in clauses (i) through (iii) above, (iv) the Assigned Property
and the Subleases related thereto and (v) any right to exercise any election or
option or make any decision or determination, or to give or receive any notice,
consent, waiver or approval, or to take any other action in respect of, but in
each case, only to the extent relating to, any Excluded Property.
"EX-IM BANK" shall mean the Export-Import Bank of the United States, an
agency of the United States of America.
"EX-IM BANK COMMITMENT" shall mean U.S.$396,822,827.
11
[Appendix A]
"EX-IM BANK COMMITMENT FEE" shall have the meaning set forth in Section
4.7(a) of the Loan Agreement.
"EX-IM BANK ELIGIBLE AMOUNT" shall mean, in respect of Aircraft, the
amount of the purchase price of such Aircraft which has been approved by Ex-Im
Bank to be eligible for Ex-Im Bank support and which amount shall not exceed the
sum of (a) eighty five per cent. (85%) of the Purchase Price for such Aircraft
and (b) one hundred per cent. (100%) of the related Ex-Im Bank Exposure Fee,
less (c) in the case of any Delivered Aircraft for which the Delivery Date
occurred one (1) month or more prior to the Borrowing Date therefor, the amount
determined by Ex-Im Bank as being equal to the aggregate amount which, based on
a loan drawdown on such Delivery Date in the amount equal to the sum of (a) and
(b) aforesaid on the basis of the same being repayable on a "mortgage style"
basis at monthly intervals over the period of twelve (12) years from such
Delivery Date in accordance with an amortization schedule calculated by
application of an assumed interest rate equal to the Relevant Rate used in
determining the amortization schedule applicable to the Loan relating to such
Aircraft, would have been repaid on or by such Borrowing Date and which amount
is set forth in the Notice of Borrowing relating to such Aircraft.
"EX-IM BANK EXPOSURE FEE" shall have the meaning set forth in Section
4.7(b) of the Loan Agreement.
"EX-IM BANK GUARANTEE" shall mean the guarantee agreement dated as of the
Signing Date by and among Ex-Im Bank and the Facility Agent.
"EX-IM BANK MAKE-WHOLE AMOUNT" shall mean, in respect of each Fixed Rate
Note, an amount (if greater than zero) as determined by Ex-Im Bank equal to (x)
the discounted cash-flow of the remaining scheduled installments of principal of
and interest on such Fixed Rate Notes assigned to Ex-Im Bank as determined as of
the date of such assignment (the "CALCULATION DATE") minus (y) the aggregate
outstanding principal amount of such Fixed Rate Notes so assigned to Ex-Im Bank.
In determining the discounted cash flow for any Fixed Rate Note, the discount
rate to be applied shall be the U.S. Treasury Rate for relevant Treasury
securities having maturities as close as practicable to the weighted average
term of the remaining scheduled installments of principal of any Fixed Rate Note
so assigned to Ex-Im Bank.
"EX-IM BANK STATUTES" shall mean each of 12 U.S.C. 635(b)(2), (b)(4),
(b)(5), and (b)(6), 22 U.S.C. 2291, et seq., 22 X.X.X, 0000, applicable
Executive Orders issued by the President of the United States, and applicable
laws and regulations of the United States of America, including, but not
limited to those provisions contained in the annual Foreign Operations, Export
Financing and Related Programs Appropriations Act, and such other Applicable Law
of the United States that may be in effect from time to time which may affect,
limit or prohibit the ability of Ex-Im Bank to issue loans, guarantees or
insurance, or to do business in certain countries or to participate in
transactions in which an item purchased with the benefit of Ex-Im Bank support
is to be used in certain countries or by an agency or national thereof (except
to the extent that the President of the United States has made a determination
in accordance with the provisions of Applicable Law that the conduct of business
by Ex-Im Bank with any such country is in the interest of the United "States),
as well as all applicable-sanctions and regulations of the United Nations.
12
[Appendix A]
"FAA" shall mean the Federal Aviation Administration of the United States
and any successor Government Body,
"FACILITY AGENT" shall mean Barclays Bank PLC, as facility agent under the
Loan Agreement.
"FEE LETTERS" shall mean each of those letters from GATX (a) dated October
31, 2001 to Ex-Im Bank; (b) dated the Signing Date to the Facility Agent; (c)
dated October 31, 2001 to Milbank, Tweed, Xxxxxx & XxXxxx LLP; and (d) such
other letters as shall be executed from time to time between GFC or any Lessee
and the Facility Agent or Security Trustee in connection with the transactions
contemplated by the Operative Documents, each in respect of the payment of
various commitment, agency, arrangement and/or other fees and/or expenses.
"FINAL DISBURSEMENT DATE" shall mean, with respect to the Loan for an
Aircraft, April 16, 2003.
"FINAL MATURITY DATE" shall mean, with respect to each Loan, the final
scheduled Loan Payment Date applicable to such Loan.
"FINAL RELEASE DATE" shall mean September 30, 2007.
"FIRST RELEASE DATE" shall mean September 30, 2003.
"FIXED RATE" shall mean, with respect to a Loan or Note, the per annum
fixed rate of interest determined with reference to the interest swap markets
and agreed between the Facility Agent and GFC on behalf of the relevant Borrower
at or before 10:00 a.m. (New York time) two (2) Business Days prior to the
Borrowing Date or Conversion Date applicable to such Loan (which rate shall be
confirmed in writing by the Facility Agent to GFC promptly following the
determination thereof) and notified in writing by the Facility Agent to Ex-Im
Bank.
"FIXED RATE NOTE" shall mean, with respect to any Loan that accrues
interest at a Fixed Rate, the promissory note issued by (a) the Initial Borrower
of such Loan on the Borrowing Date with respect to such Loan or (b) the Borrower
of such Loan on the Conversion Date (if any) for such Loan, which Note shall be
substantially in the form of Exhibit B-2 to the Loan Agreement, and "FIXED RATE
NOTES" shall mean all such notes issued by Borrowers from time to time.
"FIXED RENTAL AMOUNT" shall mean, in respect of an Aircraft and each Basic
Rent Payment Date referable to the Note related thereto, an amount in Dollars
equal to the principal amount of such Note expressed to be due and payable in
Schedule I to such Note on such Basic Rent Payment Date.
"FLOATING RATE" shall mean, with respect to an Interest Period, a per
annum rate of interest equal to LIBOR for a period equal to such Interest Period
on the Quotation Date for such Interest Period or, with respect to the Interest
Period which commences or commenced on a Borrowing Date, either such rate as
aforesaid or such other rate as is agreed by the Facility Agent, Ex-Im Bank and
GFC on or prior to such Borrowing Date.
13
[Appendix A]
"FLOATING RATE NOTE" shall mean, with respect to any Loan that accrues
interest at a Floating Rate, the promissory note issued by the Borrower of such
Loan on the Borrowing Date with respect to such Loan, which Note shall be
substantially in the form of Exhibit X-x to the Loan Agreement, and "FLOATING
RATE NOTES" shall mean all such notes issued by Borrowers from time to time.
"GAAP" shall mean generally accepted accounting principles of the United
States.
"GATX CORP" shall mean GATX Corporation, a New York corporation.
"GATX GROUP" shall mean GATX Corp and its Subsidiaries from time to time.
"GATX GUARANTEE" shall mean the guarantee agreement dated as of the
Signing Date between the Guarantors and the Security Trustee in respect of the
obligations of the Borrowers and Lessees from time to time under the Operative
Documents.
"GATX GUARANTEE CONFIRMATION" shall mean each confirmation by the
Guarantors substantially in the form set forth in Schedule 1 to the GATX
Guarantee.
"GFC" shall mean GATX Financial Corporation, a Delaware corporation.
"GOVERNMENT BODY" shall mean any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
"GUARANTEE DEFAULT" shall mean a Material Default with respect to either
Guarantor.
"GUARANTEE LEGEND" shall have the meaning set forth in the Ex-Im Bank
Guarantee.
"GUARANTEED AMOUNT" shall have the meaning set forth in the Ex-Im Bank
Guarantee.
"GUARANTOR" shall mean each of GFC and GATX Corporation.
"HOME COUNTRY" shall mean each of France, Germany, Spain, the United
Kingdom and the United States of America.
"HOME COUNTRY AIR CARRIER" shall mean an air carrier whose principal place
of business is located in any Home Country.
"HOME COUNTRY RULES" shall mean the following:
(a) Subject always to paragraphs (b), (c) and (d) immediately below,
during the period of two (2) years commencing on and following the
Borrowing Date for any Aircraft, (the "Initial Period") such
Aircraft will not be leased to any Home Country Air Carrier:
14
[Appendix A]
(b) Subject always to paragraph (c) immediately below, any Aircraft may
be leased to a Home Country Air Carrier:
(i) following the bona fide repossession of such Aircraft
by, or the delivery or redelivery of such Aircraft to,
the Operating Lessor thereof as a result of the
termination of the leasing thereof under the Initial
Operating Lease therefor prior to its scheduled expiry
date as a result of an Operating Lease Event of Default
thereunder; or
(ii) after Initial Period for such Aircraft has ended.
(c) Subject always to paragraph (d) immediately below, at no time will
any Aircraft be operated or used principally by any Home Country Air
Carrier:
(i) if, at such time. four (4) or more Aircraft would be
operated or used principally by a Home Country Air
Carrier or Home Country Air Carriers;
(ii) which is a U.S. Air Carrier;
(iii) for a term of more than five (5) years.
(d) If, following the Signing Date, Ex-Im Bank relaxes its policy
generally in relation to the matters set forth in paragraphs (a),
(b) and (c) immediately above, so long as Ex-Im Bank's policy
remains so relaxed, the foregoing restrictions shall be deemed to be
modified accordingly.
"INDEBTEDNESS" of any Person shall mean, on any date, all indebtedness of
such Person as of such date, and shall include the following: (i) all
indebtedness of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services other than in the ordinary course of business, (iv) all obligations of
such Person under leases, (v) all net indebtedness secured by a Lien other than
a Permitted Lien on any asset of such Person, whether or not such Person has
assumed or is otherwise liable for such indebtedness, (vi) all Indebtedness of
others guaranteed in any manner, directly or indirectly, by such Person (or in
effect guaranteed indirectly, by such Person through an agreement intended to
have the effect of Indebtedness or to assure the holder of Indebtedness of such
obligor against loss, whether through an obligation of such Person to purchase
property or services or to maintain such obligor's financial condition or
otherwise) and (vii) all net reimbursement obligations of such Person in respect
of letters of credit, foreign currency sale agreements and bankers' acceptances,
except such as are obtained by such Person to secure performance of obligations
(other than for borrowed money or similar obligations) incurred in the ordinary
course of such Person's business. Notwithstanding the foregoing, corporate
bilateral interline agreements and trade payables incurred in the ordinary
course of business shall not constitute "Indebtedness".
15
[Appendix A]
"INDEMNIFIED PERSON" shall have the meaning set forth in Section 10(b) of
the Participation Agreement.
"INITIAL BORROWER" shall mean, in respect of an Aircraft or the Lease,
Loan or Note referable thereto, the Person defined as the "Borrower" in the
Borrowing Date Supplement with respect to such Aircraft.
"INITIAL BORROWER PARTY" shall each mean USEB Aircraft Limited, a limited
liability company duly incorporated under the laws of the Cayman Islands.
"INITIAL LENDER" shall mean Barclays Bank PLC, a public limited liability
company incorporated and existing under the laws of England and Wales.
"INITIAL LESSEE" means, in respect of an Aircraft and the Lease therefor,
the Person defined as the "Lessee" in the Borrowing Date Supplement referable to
such Aircraft.
"INITIAL LESSEE PARENT" shall mean GATX Third Aircraft Corporation, a
Delaware corporation.
"INITIAL LESSEE PARTY" shall mean Cayman Lessee Party No. 1, Cayman Lessee
Party No. 2, the Delaware Lessee Party, the Irish Lessee Party or the Cypriot
Lessee Party.
"INITIAL LESSOR" shall each mean, in respect of an Aircraft or the Lease
referable thereto, the Person defined as the "Lessor" in the Borrowing Date
Supplement referable to such Aircraft.
"INITIAL LESSOR PARENT" shall mean Walkers SPV, not in its individual
capacity except as set forth in the Participation Agreement, but solely acting
in its capacity as trustee of the USEB Aircraft Trust under the initial
Declaration of Trust.
"INITIAL LESSOR PARTY" shall mean the Initial Borrower Party.
"INITIAL LESSEE SHARE PLEDGE AGREEMENTS" shall mean, collectively, each of
(i) the share charge agreement dated as of the first Borrowing Date by the
Initial Lessee Parent, as pledgor, in favor of the Security Trustee as secured
party in respect of the pledge of all of the shares of Cayman Lessee Party No.
1, (ii) the share charge agreement dated as of the first Borrowing Date by
Lessee Parent, as pledgor, in favor of the Security Trustee as secured party in
respect of the pledge of all of the shares of Cayman Lessee Party No. 2, (iii)
the share pledge and charge dated as of the first Borrowing Date by Lessee
Parent, as pledgor, in favor of the Security Trustee as secured party in respect
of the pledge of all of the shares of capital stock of Cypriot Lessee Party,
(iv) the Mortgage over Shares dated as of the first Borrowing Date by Lessee
Parent, as pledgor, in favor of the Security Trustee as secured party in respect
of the pledge of all of the shares of capital stock of the Irish Lessee Party,
and (v) the share pledge agreement dated as of the first Borrowing Date by
Lessee Parent, as pledgor, in favor of the Security Trustee as secured party in
respect of the pledge of all of the shares of capital stock of Delaware Lessee
Party.
"INITIAL LESSOR SHARE PLEDGE AGREEMENT" shall mean the lessor share charge
agreement dated as of the Signing Date by the Initial Lessor Parent, as chargor,
in favor of the Security Trustee, as secured party in respect of the charge of
all of the shares of USEB Aircraft Limited.
16
[Appendix A]
"INITIAL OPERATING LEASE" shall mean, in respect of an Aircraft, the
Operating Lease defined as the "Initial Operating Lease" in the Borrowing Date
Supplement referable to such Aircraft.
"INITIAL OPERATING LESSEE" shall mean, in respect of an Aircraft, the
initial Operating Lessee defined as the "Initial Operating Lessee" in the
Borrowing Date Supplement referable to such Aircraft.
"INITIAL OPERATING LESSOR" shall mean, in respect of an Aircraft, the
Lessee Party defined as the "Operating Lessor" in the Borrowing Date Supplement
referable to such Aircraft.
"INITIAL RENT" shall mean, in respect of an Aircraft, an amount equal to
the aggregate of (i) the difference between the Purchase Price for such Aircraft
and the Loan related to such Aircraft made on the Borrowing Date for such
Aircraft and (ii) the Security Amount for such Aircraft.
"INITIAL STATE OF REGISTRATION" shall mean, in respect of an Aircraft, the
State of Registration defined as the "Initial State of Registration" in the
Borrowing Date Supplement referable to such Aircraft.
"INSTRUCTING GROUP" shall mean until such time as the Ex-Im Bank Guarantee
is no longer in effect and all amounts payable to Ex-Im Bank under the Operative
Documents (excluding, for the avoidance of doubt, amounts payable in respect of
any Other Ex-Im Bank Indebtedness) have been paid in full, Ex-Im Bank; and
thereafter, until the Loans made under the Loan Agreement have been paid in full
and all amounts payable to the Lenders and the Facility Agent under the
Operative Documents have been paid in full, the Facility Agent; and thereafter,
until all Other Ex-Im Bank Indebtedness has been paid in full, Ex-Im Bank, and
thereafter, with respect only to the Borrower Collateral, GFC.
"INSURANCE PROCEEDS" shall mean, in respect of an Aircraft, any and all
proceeds realized from the Insurances for such Aircraft (other than third party
liability insurances).
"INSURANCES" shall mean, in respect of an Aircraft, any and ail contracts
or policies of insurance maintained by the relevant Lessee or any Operating
Lessee of such Aircraft in respect of such Aircraft pursuant to Section 10 of
such Lease and Section 11 of the Initial Operating Lease for such Aircraft (or
any similar provisions of any other Operating Lease for such Aircraft).
"INSURER" shall mean, in respect of any Insurances, the insurers providing
the same.
"INSURER ACKNOWLEDGMENT" shall mean, with respect to each Notice to
Insurer for each Aircraft, the acknowledgment and consent by the Insurer, in
substantially the form of Schedule 1 to each Insurance Assignment relating to
such Aircraft, provided, that such Insurer Acknowledgment shall not be required
if the Insurances for such Aircraft have an AVN67B endorsement which lists the
Assignment of Insurances and the Operating Lessor Security Assignment for such
Aircraft as "Contracts" for the purposes thereof.
17
[Appendix A]
"INTERCOMPANY LOAN" shall mean, in respect of a Lessee, each and every
loan advanced by GFC to such Lessee from time to time.
"INTEREST" shall mean, collectively, (i) the Lenders' interests in the
Loans, (ii) each Lessor Parent's interest in each Lessor, (iii) the Initial
Lessee Parent's interest in each of Cayman Lessee Party No. 1, Cayman Lessee
Party No. 2, Cypriot Lessee Party, Irish Lessee Party and Delaware Lessee Party
and any other Lessee and (iv) each other Lessee Parent's interest in any Lessee
Party.
"INTEREST PERIOD" shall mean, (i) with respect to any Loan while such Loan
bears interest at a Floating Rate, the period commencing on and including the
relevant Borrowing Date and ending on but excluding the initial Loan Payment
Date applicable to such Loan, and thereafter, each successive period commencing
on and including the last day of the immediately preceding Interest Period for
such Loan and ending on but excluding the next succeeding Loan Payment Date
applicable to such Loan; and (ii) with respect to any Loan while such Loan bears
interest at a Fixed Rate, the period commencing on and including the relevant
Borrowing Date or Conversion Date, as the case may be. and ending on but
excluding the next succeeding Loan Payment Date applicable to such Loan, and
thereafter, each successive period commencing on and including the last day of
the immediately preceding Interest Period for such Loan and ending on but
excluding the next succeeding Loan Payment Date applicable to such Loan;
provided, that if any Interest Period ends on a day which is not a Business Day,
the last day of the Interest Period shall, if the relevant Loan bears interest
at a Floating Rate, be the immediately succeeding Business Day, provided
further, that anything in the Loan Agreement to the contrary notwithstanding, an
Interest Period for any Loan that would otherwise extend beyond a Loan Payment
Date applicable to such Loan shall end on such Loan Payment Date, and the final
Interest Period for each Loan shall end on the relevant Final Maturity Date.
"INTERNATIONAL INTEREST" means an interest which is constituted as an
international interest under Article 10 of the Cape Town Convention.
"INVESTMENT EARNINGS" shall mean investment earnings on funds on deposit
in the Security Account.
"IRISH LESSEE PARTY" shall mean Xxxxxxx Leasing (Ireland) Limited, a
company duly organized under the laws of the Republic of Ireland.
"JAA" shall mean the European Joint Airworthiness Authority.
"JURISDICTIONAL QUESTIONNAIRE" shall mean, in respect of an Aircraft, a
summary(in form and substance agreed between GFC and Ex-Im Bank) of the
Applicable Law in relation to the financing of such Aircraft pursuant to the
Operative Documents in the proposed or then current State of Registration for
such Aircraft.
"LEASE" shall mean, in respect of an Aircraft, the lease agreement dated
as of the Borrowing Date for such Aircraft between the Lessor and the Lessee for
such Aircraft, substantially in the form of the "Form of Lease and Credit Sale
Agreement No. [ ]" initialed on the Signing Date for the purposes of
identification by Milbank, Tweed, Xxxxxx & XxXxxx LLP and Xxxxxxxx Chance LLP.
18
[Appendix A]
"LEASE DEFAULT" shall mean shall mean a Lease Event of Default or an event
or condition that, with the giving of notice or lapse of time or both, would
become a Lease Event of Default.
"LEASE EVENT OF DEFAULT" shall have, in respect of an Aircraft, the
meaning set forth in Section 13 of the Lease for such Aircraft.
"LEASE SUPPLEMENT" shall mean, in respect of an Aircraft, the lease
supplement, dated the Borrowing Date for such Aircraft, between the Lessor and
Lessee for such Aircraft, substantially in the form of Exhibit I to such Lease
for such Aircraft, or such other supplement to the Lease for such Aircraft as
entered into from time to time between such Lessor and Lessee under such Lease.
"LENDER" shall mean, in respect of any Note or the Loan relating thereto:
(a) at any time prior to any demand for payment being made under the Ex-Im Bank
Guarantee for any amount due under such Note or related Loan, the registered
owner or owners of such Note and Loan on the register maintained by the Facility
Agent pursuant to Section 4.6 of the Loan Agreement, and (b) after any demand
for payment being made under the Ex-Im Bank Guarantee for any amount due under
such Note or related Loan, Ex-Im Bank.
"LENDER LIEN" shall mean, in respect of an Aircraft, any Lien on the
Airframe, any related Engine or Part arising as a result of or in connection
with (i) claims against or affecting any Lender, the Security Trustee, the
Facility Agent or Ex-Im Bank (each a "LENDER PERSON") or any of their respective
Affiliates (other than in the case of Ex-Im Bank, the United States of America,
or any agency or instrumentality thereof) that are not related to the
transactions contemplated by the Operative Documents (but specifically excluding
any debt, liability or other obligation imposed on any Lender Person or any of
its Affiliates as a result of the use, operation or maintenance of such Aircraft
while subject to the Lease for such Aircraft and any Lien created pursuant to
any Operative Document), (ii) any act or omission of any Lender Person or any of
its Affiliates (other than in the case of Ex-Im Bank, the United States of
America, or any agency or instrumentality thereof) that is not related to the
transactions contemplated by the Operative Documents, or (iii) Taxes (including
claims therefor) or Claims imposed on any Lender or any of its respective
Affiliates (other than in the case of Ex-Im Bank, the United States of America,
or any agency or instrumentality thereof) for which no Lessee is obligated to
indemnify pursuant to any of the Operative Documents.
"LENDING OFFICE" shall mean, for each Lender, the Lending Office or
Lending Offices of such Lender designated in the relevant Loan Agreement or such
other office of such Lender as such Lender may from time to time specify upon at
least five (5) Business Days prior written notice to the Borrowers, GFC and the
Facility Agent.
"LESSEE" shall mean, in respect of an Aircraft and the Lease referable
thereto, (a) as from the Borrowing Date with respect to such Aircraft, the
Initial Lessee of such Aircraft under such Lease and (b) thereafter from time to
time any other Person that shall, in accordance with the Operative Documents,
have become and be the Lessee of such Aircraft under such Lease.
"LESSEE PARTY" shall mean (a) each Initial Lessee Party and (b) each other
Person that shall have become a Lessee Party for the purposes of the Operative
Documents.
19
[Appendix A]
"LESSEE PARENT" shall mean, with respect to each Initial Lessee Party, the
Initial Lessee Parent and, with respect to any other Lessee Party, the Person
named as the Lessee Parent of such other Lessee in the Designation Letter
referable to such other Lessee.
"LESSEE PERFECTION MECHANICS" shall have, in respect of an Aircraft, the
meaning giving to such to term in the Borrowing Date Supplement for such
Aircraft.
"LESSEE POWER OF ATTORNEY" shall mean, in respect of an Aircraft, the
power of attorney executed by the Lessee of such Aircraft in favor of the
Security Trustee pursuant to Section 4(i) of the Aircraft Mortgage for such
Aircraft.
"LESSEE SHARE PLEDGE AGREEMENT" shall mean, in respect of any Initial
Lessee Party, the Initial Lessee Share Pledge Agreement relating to such Initial
Lessee Party and, in relation to any other Lessee Party, the pledge of all of
the shares of capital stock of such other Lessee Party granted by the Lessee
Parent of such other Lessee Party in favor of the Security Trustee as
contemplated in Section 6A of the Participation Agreement substantially in the
form of such Initial Lessee Share Pledge Agreement.
"LESSOR" shall each mean, in respect to an Aircraft or the Lease referable
thereto, (a) as from the Borrowing Date with respect to such Aircraft, the
Initial Lessor of such Aircraft under such Lease and (b) thereafter from time to
time any other Person that shall, in accordance with the Operative Documents,
have become and be the Lessor of such Aircraft under such Lease.
"LESSOR LIEN" shall mean, in respect of an Aircraft, any Lien on any
related Airframe, Engine, Part, any Collateral, any payments pursuant to the
Operative Documents or any part of the Trust Estate arising as a result of or in
connection with (i) claims against or affecting the Lessor or Borrower referable
to such Aircraft, the relevant Lessor Parent or Walkers SPV (or any Affiliate of
any thereof) that are not related to the transactions contemplated by the Lease
for such Aircraft and the other Operative Documents, (ii) any act or omission of
such Lessor, Borrower, Lessor Parent or Walkers SPV (or any Affiliate of any
thereof) that is not related to the transactions contemplated by such Lease and
the other Operative Documents or is in violation of any of the terms hereof or
of the other Operative Documents, or (iii) Taxes (including claims therefor) or
Claims imposed on such Lessor, Borrower, Lessor Parent or Walkers SPV or any of
its respective Affiliates for which no Lessee is obligated to indemnify pursuant
to any of the Operative Documents.
"LESSOR PARENT" shall mean, in respect of the Initial Lessor Party, the
USEB Aircraft Trust and, in respect of any other Lessor Party, the trust or
other Person that is the legal and beneficial owner of such Lessor Party.
"LESSOR PARENT TRUST" shall mean, in respect of the Initial Lessor Party,
the USEB Aircraft Trust and, in respect of any other Lessor Party, the trust
that is the legal and beneficial owner of such Lessor Party.
"LESSOR PARENT TRUST COMPANY" shall mean, in the case of the Initial
Lessor Party, Walkers SPV and, in the case of any other Lessor Party, such
Person that is the legal owner of such Lessor Party.
20
[Appendix A]
"LESSOR PARTY" shall mean (a) the Initial Lessor Party and (b) each other
Person that shall have become a Lessor Party for the purposes of the Operative
Documents.
"LESSOR POWER OF ATTORNEY" shall mean, in respect of an Aircraft, the
power of attorney executed by the Lessor of such Aircraft in favor of the
Security Trustee pursuant to Section 4(i) of the Aircraft Mortgage of such
Aircraft.
"LESSOR SHARE PLEDGE AGREEMENTS" shall mean, in respect of the Initial
Lessor Party, the Initial Lessor Share Pledge Agreement and, in relation to any
other Lessor Party, the pledge or charge of all of the shares of capital stock
of such other Lessor Party granted by the Lessor Parent of such other Lessor
Party in favor of the Security Trustee as contemplated in Section 6A of the
Participation Agreement.
"LIBOR" shall mean, in relation to any amount in any currency on which
interest is to accrue and any period for which the same is to be established,
the offered rate per annum for deposits in Dollars equal, or as close as
practicable, to the period for which such rate is to be established which
appears on the Telerate Page 3750 (or such other page as may replace such
Telerate Page 3750 for the purpose of displaying London Interbank offered rates
for Dollar deposits) at or about at 11:00 a.m. (London time) on the Quotation
Date therefor; provided that, if at or about 11:00 a.m. (London time) on the
relevant Quotation Date no such rate is appearing on Telerate Page 3750 (or any
such replacement page) then "LIBOR" in respect of the relevant period shall be
the arithmetic mean, as determined by the Facility Agent, of the rates per annum
(rounded upwards, if necessary, to the fourth decimal place) appearing on the
Reuters screen "LIBO" page in respect of amounts denominated in Dollars (or such
other page as may replace such "LIBO" page for the purpose of displaying London
Interbank offered rates for Dollar deposits), at or about 11:00 a.m. (London
time) on such Quotation Date and provided further that if at or about 11:00 a.m.
(London time) on such Quotation Date no such rate is appearing on the Reuters
screen "LIBO" page (or any such replacement page) then "LIBOR" means the rate
per annum determined by the Facility Agent to be equal to the arithmetic mean
(to four (4) decimal places) of the rates (as notified to the Facility Agent) at
which each of the Reference Banks was offering to prime banks in the London
Interbank Market deposits in Dollars equal, or as close as practicable, to such
period at or about 11:00 a.m. (London time) on the Quotation Date for such
period; provided further that, if on such Quotation Date no Reference Bank
provides such offered quotations, "LIBOR" shall be the arithmetic mean (to four
(4) decimal places) of the offered per annum rates that one or more leading
banks in New York City (selected by the Facility Agent) are quoting as of 11:00
a.m., New York City time, on such Quotation Date to leading European banks for
Dollar deposits for a period most nearly comparable to such relevant period;
provided further that if such banks are not quoting as described above, "LIBOR"
for such date shall be the cost, as determined by the Facility Agent, of funding
the relevant amount for the relevant period from whatever sources it may
reasonably select from time to time.
"LIEN" shall mean as applied to the property or assets (or the income or
profits therefrom) of any Person (in each case, whether the same is consensual
or non-consensual or arises by contract, operation of law, legal process or
otherwise), any lien, mortgage, encumbrance, pledge, attachment, levy, charge,
lease, inscription on a public record, adverse claim, right of others or
security interest of any kind, including any thereof arising under any
21
[Appendix A]
conditional sale or other title retention agreement and any agreement to give
any thereof in respect of any property or assets of such Person, or upon the
income or profits therefrom.
"LOAN" shall mean, in respect of an Aircraft, the loan made to the
Borrower referable to such Aircraft pursuant to the Loan Agreement on the
Borrowing Date for such Aircraft and, "Loans" shall mean, collectively, each of
the loans made to the Borrowers pursuant to the Loan Agreement for such Aircraft
and the Other Aircraft.
"LOAN AGREEMENT" shall mean the Loan agreement dated as of the Signing
Date among the Initial Borrower Party, as borrower, the Initial Lender, the
Facility Agent, the Security Trustee and Ex-Im Bank.
"LOAN DOCUMENTS" shall mean the Loan Agreement, the Notes, the Borrower
Indemnity Agreement, the Ex-Im Bank Guarantee and the Security Documents.
"LOAN DEFAULT" shall mean a Loan Event of Default or an event or condition
that, with the giving of notice or lapse of time or both, would become a Loan
Event of Default.
"LOAN EVENT OF DEFAULT" shall have the meaning set forth in Section 10.1
of the Loan Agreement.
"LOAN PAYMENT DATE" shall mean (A) in respect of the Loan made or to be
made in respect of an Aircraft in respect of which, and so long as, interest
thereon accrues at a Floating Rate, (i) the first Monthly Date occurring at
least one (1) calendar month after the Borrowing Date for such Loan (provided
that if such Borrowing Date is a Monthly Date the first Loan Payment Date shall
be the Monthly Date in the next calendar month) and (ii) each successive Monthly
Date thereafter up to and including the Monthly Date which occurs on the twelfth
(12th.) anniversary of the Delivery Date of such Aircraft or (if such twelfth
(12th.) anniversary does not occur on a Monthly Date) the Monthly Date last
occurring prior to such twelfth (12th.) anniversary (or such later Monthly Date
agreed by Ex-Im Bank as set forth in Schedule I to the Note for such Loan),
provided, that, if any such Monthly Date occurs on a day which is not a Business
Day, the relevant Loan Payment Date shall be the immediately succeeding Business
Day or (B) in respect of the Loan made or to be made in respect of each Aircraft
in respect of which, and so long as, interest thereon is to accrue at a Fixed
Rate, (i) the first Quarterly Date occurring after the Borrowing Date or
Conversion Date (as appropriate) for such Loan and (ii) each successive
Quarterly Date thereafter up to and including the Quarterly Date which occurs on
the twelfth (12th.) anniversary of the Delivery Date of such Aircraft or (if
such twelfth (12th) anniversary does not occur on a Quarterly Date) the
Quarterly Date last occurring prior to such twelfth (12th) anniversary (or such
later Quarterly Date agreed by Ex-Im Bank as set forth in Schedule I to the Note
for such Loan), provided that, if any such Quarterly Date or such twelfth
(12th.) anniversary occurs on a day which is not a Business Day, the relevant
Loan Payment Date shall be the immediately succeeding Business Day.
"LOCAL COUNSEL" shall mean, in respect of an Aircraft, the special counsel
on matters relating to the law of the State of Registration of such Aircraft, as
acceptable to Ex-Im Bank, and, in the case of the Initial State of Registration,
shall have the meaning set forth in the Borrowing Date Supplement referable to
such Aircraft.
[Appendix A]
"LOCAL MORTGAGE" shall mean, with respect to an Aircraft, (i) any aircraft
mortgage, security agreement or similar document for such Aircraft (other than
the Aircraft Mortgage for such Aircraft) required by the Applicable Law of the
State of Registration for such Aircraft in order to properly record or perfect
the Security Trustee's Lien on the Mortgaged Property in such State of
Registration, and (ii) the form of the Aircraft Mortgage (if not the same in all
material respects as the Aircraft Mortgage) for such Aircraft, if any, recorded
with the Civil Aviation Authority or any other Government Body under the
Applicable Laws of the State of Registration for such Aircraft as contemplated
in Section 6 of such Aircraft Mortgage.
"LONDON BUSINESS DAY" shall mean any day other than a Saturday or Sunday
on which commercial banks are not authorized or required to close in London,
England and which is also a day on which dealings in Dollar deposits are carried
out in the London interbank market.
"LTV RATIO" shall mean, in respect on an Aircraft, the aggregate Appraised
Value (at the time of determination) of the Other Aircraft expressed as a
percentage of the aggregate amount of the Loans outstanding (at the time of
determination) for such Other Aircraft.
"MAINTENANCE PROGRAM" means, in respect of an Aircraft, so long as such
Aircraft is being leased to an Operating Lessee pursuant to an Operating Lease,
the "Maintenance Program" as defined in such Operating Lease and during any
period that the Aircraft is Off-Lease, the overhaul and maintenance program
(including, with respect to storage of such Aircraft) for such Aircraft
determined by GFC in accordance with the Standard and approved by the State of
Registration for such Aircraft.
"MAJORITY LENDERS" shall mean one or more Lenders having at least 66-2/3%
of the principal amount of the Loans, from time to time outstanding, or if no
Loan is outstanding, having at least 66-2/3% of the Commitments; provided that
after any assignment by all of the Lenders to Ex-Im Bank of the Notes under the
Ex-Im Bank Guarantee, "Majority Lenders" shall mean, to the extent of such
assignment, Ex-Im Bank.
"MANDATORY PREPAYMENT EVENT" has the meaning set forth in Section 15 of
each Lease.
"MANUALS AND TECHNICAL RECORDS" shall mean, with respect to any Aircraft,
Engine or Part, (a) all books, logs, manuals and data, and inspection,
maintenance, modification and overhaul records (including all job cards) and any
certificates or documents as are required to be maintained with respect to such
Aircraft Engine or Part under applicable rules and regulations of the Civil
Aviation Authority referable to such Aircraft or by applicable supplier
warranties (or other similar guarantees or warranties of any Manufacturer or
supplier of any Aircraft, Engine or Part) or by any applicable requirements of
any insurer to be kept or maintained with regard to such Aircraft, Engine or
Part and (b) all such records as shall be necessary to constitute complete,
accurate and current records (i) in accordance with good aeronautical practice
of flights made by such Aircraft, Engine or Part, (ii) of all maintenance
modifications and repairs carried out and all incidents and damage occurring to
such Aircraft, Engine or Part and (iii) to show the location of such Aircraft,
Engine or Part.
"MANUFACTURER" shall mean The Boeing Company, a Delaware corporation.
23
APPENDIX AF
APPLICATION OF FUNDS
Section 1. Application of Aircraft Proceeds.
All amounts constituting Aircraft Proceeds in respect of an Aircraft (a
"Relevant Aircraft") received by the Security Trustee under any of the Operative
Documents or amounts received by the Security Trustee in respect of any other
Collateral (including the Assigned Property relating to the Relevant Aircraft,
the Account Collateral or the Pledged Securities) or any payments received by
the Security Trustee under the GATX Guarantee, after the occurrence, and during
the continuance, of a Loan Event of Default or a Lease Event of Default, shall
be held by the Security Trustee upon trust and, forthwith upon receipt by the
Security Trustee, shall be paid in accordance with the following order of
priorities (in each case to the extent the same are due and payable but unpaid):
FIRST, in or towards payment or reimbursement of all fees, costs and
expenses of the Security Trustee in connection with its entering upon, taking
possession of, holding, operating, managing, selling or otherwise disposing of
the Relevant Aircraft or any other related Collateral or any portion thereof,
any and all Taxes, assessments or other charges of any kind imposed on the
Security Trustee in connection with such Relevant Aircraft or the related
portion of the Trust Estate or on such Relevant Aircraft or the related portion
of the Trust Estate in priority to the Liens of any Security Document that the
Security Trustee determines in good faith to pay or be paid pursuant to written
instructions from the Instructing Group, and any other amounts payable to the
Security Trustee under the Participation Agreement or under any of the Security
Documents in respect of any indemnities or other obligations of the Borrower
related to the Relevant Aircraft (the "Relevant Borrower") or the Lessee of such
Relevant Aircraft (the "Relevant Lessee") relating thereto;
SECOND, in or towards payment of all accrued and unpaid default interest
then owing to Ex-Im Bank by the Relevant Borrower under the Operative Documents
in respect of or related to the Relevant Aircraft;
THIRD, in or towards payment of all accrued and unpaid interest (other
than default interest) then owing by the Relevant Borrower in respect of the
Loan in respect of or related to the Relevant Aircraft to be divided pari passu
and pro rata among the Lenders;
FOURTH, in or towards repayment, or as the case may be, prepayment of all
principal then owing by the Relevant Borrower in respect of the Loan in respect
of or related to the Relevant Aircraft to be divided pari passu and pro rata
among the Lenders;
FIFTH, in or towards payment of any other amount, indebtedness or
obligation then owing to Ex-Im Bank under any Operative Document in respect of
or related to the Relevant Aircraft (including, without limitation, any amount
then owing to Ex-Im Bank by way of assignment of, or subrogation to, the rights
of the Lenders and including, without limitation, the Ex-Im Bank Make-Whole
Amount, if any);
Page 1
SIXTH, in or towards payment of all fees, costs and expenses due to the
Facility Agent from the Relevant Borrower or either Guarantor under any
Operative Document in respect of the Loan related to the Relevant Aircraft);
SEVENTH, in or towards payment of any other amount due to the Lenders or
the Facility Agent (including, without limitation, fees default interest, swap
breakage costs, break funding costs, prepayment premium, increased costs or
Taxes then owing by the Relevant Borrower or either Guarantor under any
Operative Document) in respect of the Loan related to the Relevant Aircraft to
be divided pari passu and pro rate among such Lenders and the Facility Agent;
EIGHTH, in or towards payment of any other amount, indebtedness or
obligation then owing by the Relevant Borrower or the Relevant Lessee under any
Operative Document to the Security Trustee in respect of or related to the
Relevant Aircraft;
NINTH, in respect of any Aircraft other than the Relevant Aircraft (the
"Other Aircraft"), in or towards payment of the amounts referred to in, and in
the respective order of priorities set forth in, clauses "First" through
"Eighth" of this Section 1 (to the extent such amounts are due and payable but
unpaid) in the order, priority and manner of application set out therein as if
such references were to amounts due and owing in respect of or related to the
Other Aircraft to be divided pro rata between such Other Aircraft based upon the
then outstanding principal amounts of the Loans in respect of such Other
Aircraft;
TENTH, in or towards payment of any other amount, indebtedness or
obligation then owing to Ex-Im Bank in respect of the Other Ex-Im Bank
Indebtedness: and
ELEVENTH, the balance, if any, thereof thereafter remaining to GFC (on
behalf of the Relevant Lessee) or any other Persons as may then lawfully be
entitled thereto;
it being understood and agreed that the Relevant Borrower and Relevant Lessee
shall remain liable to the extent of any deficiency between the amount of such
proceeds and the aggregate amount of the obligations referred to in clauses
"FIRST" through "TENTH " of this Section 1.
Section 2. Application of Scheduled Payments.
(a) So long as no Lease Event of Default or Loan Event of
Default shall have occurred which is continuing, the Facility Agent, upon
receipt of each payment of principal of, or interest on, the Loan in
respect of or related to an Aircraft under the Loan Agreement shall apply
such amount in accordance with Section 4.1(c) of the Loan Agreement.
(b) Upon the occurrence and during the continuation of a Lease
Event of Default under the Lease for an Aircraft or a Loan Event of
Default, any payment of principal of, or interest on, the Loan related to
such Aircraft, Basic Rent under such Lease or Operating Lease Rent under
the Operating Lease for such Aircraft, in each case received by the
Security Trustee, the Borrower of such Loan, the Lessee of such Aircraft
the Operating Lessor of such Aircraft, or any Secured Party (as the case
may be) following receipt of notice from the Security Trustee or Ex-Im
Bank of the occurrence of such Lease Event of Default or Loan Event of
Default (which notice shall, inter alia,
Page 2
instruct such persons to pay such monies to the Security Trustee) shall,
if received by such Borrower or Lessee or Operating Lessor or any Secured
Party, be paid over to the Security Trustee and, if received by the
Security Trustee, be held by the Security Trustee upon trust to be applied
in accordance with Section 1.
(c) If Ex-Im Bank issues a Review Notice to GFC as
contemplated in Section 21 (f)(ii) of the Participation Agreement and has
notified GFC of its desire to have such payments paid directly to the
Security Trustee, any payment of Operating Lease Rent received by the
Security Trustee, any Borrower, any Lessee, any Operating Lessor or any
Secured Party (as the case may be), shall be paid over to, or held by, the
Security Trustee upon trust and applied as follows:
(i) So long as no Lease Event of Default or Loan Event of
Default shall have occurred which is continuing, such amounts shall
be paid to the relevant Operating Lessor or as it directs; or
(ii) Upon the occurrence and during the continuance of a Lease
Event of Default or a Loan Event of Default, such amounts shall be
applied in accordance with Section 1.
Section 3. Application of Insurance Proceeds. So long as no Lease Event of
Default under the Lease for an Aircraft or Loan Event of Default shall have
occurred which is continuing, all Insurance Proceeds with respect to such
Aircraft received by the Security Trustee as loss payee or, as the case may be,
the Borrower of the Loan related to such Aircraft, the Lessee of such Aircraft
or any other Secured Party in respect of the Insurances for such Aircraft shall,
if received by such Borrower, Lessee or other such Secured Party, be paid over
to the Security Trustee and, if received by the Security Trustee, shall be held
by the Security Trustee upon trust to apply the same as follows:
(a) such Insurance Proceeds on account of Event of Loss of
such Aircraft shall be applied in accordance with clauses "FIRST" through
"EIGHTH " AND "ELEVENTH" of Section 1 hereof as if such Aircraft was the
"Relevant Aircraft" thereunder (it being understood that such Borrower and
Lessee shall remain liable to the extent of any deficiency between the
amount of the Insurance Proceeds and the aggregate amount of the Secured
Obligations referred to in clauses "FIRST" through "EIGHTH " of Section
1);
(b) such Insurance Proceeds received on account of any loss of
or damage to an Aircraft (in circumstances not constituting an Event of
Loss of such Aircraft) shall, subject to Section 3(d) below, be applied
directly (at the request of GFC) to the cost of restoration, repair or
replacement ("Restoration") or to reimburse such Lessee for the cost of
Restoration, upon receipt of a written application from GFC showing in
reasonable detail the nature and cost of such Restoration (and in the case
of reimbursement, evidence of payment); to the extent that such Insurance
Proceeds may be insufficient to pay the cost or the estimated cost of
completing such Restoration, GFC or such Lessee will pay or procure the
payment of such deficiency;
Page3
(c) Insurance Proceeds received on account of a claim under
the Insurances referred to in paragraph (a) of Schedule 5 of the
Participation Agreement shall be applied in discharge of, or reimbursement
to the payer of a payment made in discharge of, the liability to which
such claim relates; and
(d)Upon the occurrence and during the continuation of a Lease
Event of Default under the Lease for an Aircraft or Loan Event of Default,
any Insurance Proceeds with respect to such Aircraft received by the
Security Trustee, the Borrower of the Loan related to such Aircraft, the
Lessee of such Aircraft or any Secured Party (as the case may be) shall,
if received by such Borrower or Lessee or Secured Party, be paid over to
the Security Trustee and, if received by the Security Trustee, shall be
held by the Security Trustee upon trust to be applied in accordance with
Section 1.
Section 4. Application of Requisition Compensation.
(a) So long as no Lease Event of Default under a Lease of an
Aircraft or Loan Event of Default shall have occurred which is continuing
(subject to Section 9(d) of the Lease), all Requisition Compensation with
respect to such Aircraft received by the Security Trustee, the Borrower of
the Loan related to such Aircraft, the Lessee of such Aircraft or any
Secured Party (as the case may be) shall, if received by such Borrower or
Lessee or any other such Secured Party, be paid over to the Security
Trustee and, in either case, upon receipt by the Security Trustee, shall
be applied in accordance with clauses "First" through "Eighth" and
"Eleventh" of Section 1 hereof as if such Aircraft was the "Relevant
Aircraft" thereunder (it being understood that such Borrower and Lessee
shall remain liable to the extent of any deficiency between the amount of
the Requisition Compensation and the aggregate amount of the Secured
Obligations referred to in clauses "First" through "Eighth " of Section
1).
(b) Upon the occurrence and during the continuation of a Lease
Event of Default under a Lease of an Aircraft or Loan Event of Default,
any Requisition Compensation with respect to such Aircraft received by the
Security Trustee, the Borrower of the Loan related to such Aircraft,
Lessee of such Aircraft or any Secured Party (as the case may be) shall,
if received by such Borrower or Lessee or any Secured Party, be paid over
to the Security Trustee and, if received by the Security Trustee, shall be
held by the Security Trustee upon trust to be applied in accordance with
Section 1.
Section 5. Application of Other Amounts.
Subject to Sections 1,2,3 and 4 hereof, any payments received
by the Security Trustee for which provision as to the application thereof
is made in an Operative Document but not elsewhere in this Agreement
(including fees and indemnities) shall be paid to the Person specifically
described in the applicable Operative Document and applied to the purposes
for which such payments were made in accordance with the provisions of
such Operative Document.
Page 4
APPENDIX MP
MATERIAL ADVERSE EFFECT PROCEDURES
1. GFC and Ex-Im Bank hereby agree as follows:
1.1 If an event or circumstance occurs which in the reasonable opinion of
Ex-Im Bank has or could have a Material Adverse Effect on either or both
Guarantors then Ex-Im Bank may issue a notice (a "REVIEW NOTICE") to GFC.
1.2 Thereafter, without prejudice to any of Ex-Im Bank's rights under the
Operative Documents, Ex-Im Bank and GFC will consult with each other in
good faith for a period of up to 30 days (or such longer period as may be
agreed by Ex-Im Bank and GFC) after the issue of a Review Notice to
determine what additional security or other solution (if any) with respect
to the financing of any or all of the Aircraft would be acceptable to Ex-
lm Bank. GFC acknowledges that Ex-Im Bank may request that GFC provide
adequate additional security in these circumstances,
1.3 After completion of the procedures described in paragraph 1.2 hereof, if:
(a) in the opinion of Ex-Im Bank either:
(i) no additional security is available (or the available security
is not sufficient) or other solution to satisfy Ex-Im Bank; or
(ii) GFC do not provide to Ex-Im Bank's satisfaction any additional
security requested by Ex-Im Bank within 10 Business Days after
such request; and
(b) a Ratings Event (as defined below) has occurred and is continuing
and such Material Adverse Effect is continuing,
then Ex-Im Bank may, by giving notice not earlier than 30 days and not
later than 45 days (or such other period as may be agreed between GFC and
Ex-Im Bank) after the date of the Review Notice, issue a notice to GFC
stating that a Mandatory Prepayment Event shall have occurred and is
continuing for the purposes of Section 15 of the Lease for each Aircraft
and instructing the Security Trustee to demand repayment of the relevant
Loan and/or Loans under the Loan Agreement.
1.4 It is expressly acknowledged and agreed that any failure by the relevant
Borrower to pay or procure the payment of the sums under the Loan
Agreement referred to in paragraph 1.3 within the time periods specified
in the Loan Agreement shall constitute a Loan Event of Default.
2. For the purposes of:
(a) this letter, a "Rating Event" shall have occurred and be continuing;
and
Page 1
(b) the Operative Documents, a "Mandatory Prepayment Event" shall have
occurred and be continuing,
if, at any such time, GFC's (or if not rated, GFC Corp's) long term debt
obligations are rated (a) less than "single B plus" by S&P, (b) less than
"B1" by Xxxxx'x and (c) less than "B+" by Fitch, Inc.
Page 2
